South Korea's finance ministry on Tuesday called for the passage of a revised tax bill centering on providing more incentives for chipmakers, claiming Asia's No. 4 economy should not miss the "golden hour" to revitalize the chip industry. In January, the government proposed a tax code revision to apply a higher tax credit rate of 15 percent on facility investment in the chip industry for conglomerates, higher than the current rate of 8 percent. The rate for small and medium-sized businesses will also rise from 16 percent to 25 percent. An additional 10 percent cut will also be applied for the increased amount of investments compared with the average of the previous three years. Finance ministry calls for passage of tax bill for chipmakers - 2 "The record high tax credit will play a decisive role in inducing companies that are mulling making an investment this year," the Ministry of Economy and Finance said in a statement. The ministry added these measures are necessary, considering major countries, including the United States, are rolling out massive incentives and tax cuts to secure their own supply chain in the chip industry. Members of the Organization for Economic Cooperation and Development also have been lowering corporate taxes to attract global players and beef up investment, the ministry added, pointing out South Korea also needs to come up with support measures in a timely manner. "This year, economies of major trade partners are expected to remain sluggish. It is inevitable for South Korea to lose steam in exports and consumption, leading to slowed growth," the ministry said. Semiconductors accounted for 18.9 percent of South Korea's total exports in 2022. They also took up 24.7 percent of the country's facility investment last year. Exports of chips, meanwhile, plunged 41.2 percent on-year over the first 10 days of March, reflecting the slowing global demand. "The revision should be made promptly to remove uncertainties in terms of taxation," the ministry added.

Source: Yonhap News Agency