JEJU ― Korea should crank up efforts to ease regulations and cut taxes to up corporate competitiveness, said Sohn Kyung-shik, chairman of the Korea Chamber of Commerce & Industry.
At a forum hosted by the country’s largest business lobby, Sohn called on the government to remain steadfast in its plan to lower corporate taxes to 20 percent from the current 22 percent starting next year.
KCCI chairman Sohn Kyung-shik delivers a speech at a forum hosted by the organization, which kicked off on the southern resort island of Jeju, on Wednesday. (Yonhap News)
“Such tax cuts will help the government lift tax revenues in the long term as companies generate more jobs and boost their competitiveness,” he said in his keynote speech. About 600 company leaders, academics and public officials attended the annual event, which kicked off Thursday in Jeju, the country’s southernmost resort island.
Tax reduction was one of the key campaign pledges by President Lee Myung-bak, a former executive. But a political backlash has been threatening to derail his administration’s push.
“Regulations have been loosened a bit since this administration, but further efforts are necessary. The government should not waver because of the election next year,” said Sohn, who also heads CJ Group, a food and media-focused conglomerate.
Sohn also stressed the significance of small and medium-sized enterprises in the economy, saying more tax benefits for inheritance and facility investment would help them create employment and spur growth.
But he spoke out against an ongoing quarrel between major corporations and their smaller partners, although he dispelled the need for an institutional mechanism to mediate it.
“We have to root out unfair practices against SMEs, but institutionalization is not the answer to the problem given potential side effects caused by one-size-fits-all criteria,” Sohn said.
The country’s business circle has been plagued by deepening income asymmetry and large firms’ rampant mistreatment of their suppliers including forcing price cuts.
A semi-official commission sought to adopt an index to gauge 56 conglomerates’ commitments to sharing profits, following President Lee’s “fair society” initiative launched in 2010. But businesspeople and conservatives fired out criticism, saying the measure lacks reality and undercuts the dynamics of free markets.
By Shin Hyon-hee (heeshin@heraldcorp.com)
