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(LEAD) Finance minister urges passage of bill on tax incentives for chipmakers

All News 10:57 February 28, 2023

(ATTN: RECASTS throughout with revised ministry release; CHANGES slug, headline, photo)

SEOUL, Feb. 28 (Yonhap) -- South Korea's chief economic policymaker called Tuesday for parliament to promptly pass a bill on providing more tax incentives to chipmakers amid the prolonged downturn in exports.

At a Cabinet meeting, Finance Minister Choo Kyung-ho pointed out that the passage of the bill is necessary to beef up the competitiveness of the chip industry.

"Unfortunately, the bills that need to be urgently passed for the economy, including a revised tax law that aims to bolster the competitiveness of the country's strategic industries, such as chips, have not been passed at parliament," Choo said in a statement.

In January, the government said it plans to expand tax incentives for strategic industries, such as chips, amid the heightening competition in the global market.

Under the proposed tax code revision, the government will apply a higher tax credit rate of 15 percent on facility investment in the chip industry for conglomerates, which is above the revision of 8 percent passed at parliament in December.

The rate for small and midsized businesses will also rise from 16 percent to 25 percent.

South Korea's exports of chips, meanwhile, have been losing ground over recent months amid sluggish global demand.

Over the first 20 days of February, exports of chips, the backbone of Asia's No. 4 economy, dipped 43.9 percent to $3.8 billion, amid the downcycle of the semiconductor industry.

Finance Minister Choo Kyung-ho speaks during a Cabinet meeting in Seoul on Feb. 28, 2023. (Yonhap)

Finance Minister Choo Kyung-ho speaks during a Cabinet meeting in Seoul on Feb. 28, 2023. (Yonhap)


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