Reasons for Proposal
Young people, who will lead the future of Korea, are currently suffering severe economic and social challenges due to difficulties in getting gainful employment. Statistics Korea reported in August 2020 that the youth unemployment rate in Korea stood at 7.7%, which is more than twice the overall employment rate of 3.1%.
Improving the current social environment where young people cannot work due to a lack of decent jobs, creating jobs for young people, and giving them hope are the best course of action to ensure a future growth engine in the country and the country’s most important responsibility to achieve sustainable economic development and social stability.
In this regard, the Youth Tax Act is proposed to ensure sustainability and stability in youth job projects by securing funding sources for the projects, including preparing jobs for young people.
Details
A. Secure funding sources required for projects to create jobs for young people and improve economic and social conditions for young people (Article 1).
B. Impose a youth tax on Korean business entities as well as foreign business entities with domestic source income (Article 3).
C. Determine the youth tax amount by multiplying the assessed corporate tax amount for a business entity’s income and liquidation income in its business year by 1 out of 100 (Articles 4 and 5).
D. Require reporting youth tax assessment standards and paying youth tax when reporting corporate tax assessment standards and paying corporate tax (Article 7).
E. Define the effective period of this Act as December 31, 2031 (Addenda Article 2).
Notes
A. This Act rests on the premise that the Partial Amendment to the Special Act on the Promotion of Youth Employment (Bill no. 8280) and the Partial Amendment to the National Finance Act (Bill no. 8282), represented and proposed by National Assembly member Jang Kyung-tae, are passed. If the bills are not passed or are passed with modifications, this Act must be adjusted accordingly.
B. This Act needs to be designated as a legislative bill annexed to the 2022 budget bill under Article 85-3 paragraph 4 of the National Assembly Act.
Major Provisions
Articles 3, 4, 5, 7, and 8
