Perfect Inclusive Inheritance Tax System Abuses the Right to Tax

Son Byeong-du, vice-president of the federation of Korean industries (FKI) strongly repelled major ‘Chaebol policy’ brought by the president-elect Roh Moo-hyun.

It is the first that a business community acted publicly against the large company policy of the next government. There seemed to be a trouble between the government and the business community for this policy.

He appeared in a program of the peace broadcasting system on January 4, and emphasized that the next government must adjust the focus of the policy to increase the company competitiveness through easing of regulation.

He also added, “It is impossible and unreal to separate the large company and Chaebol. Through corporate restructuring of five years, the large company and Chaebol is not classified any more.”

In relation to an introduction of perfect inclusiveness of inheritance tax and gift tax which the president-elect Roh is currently promoting, he said, “Because it runs counter to the tax legalism which must classify the tax conditions and could abuse the right to tax, its introduction must be careful.”

In terms of a liquidation of the corporate restructuring office of the group, he indicated, “OECE already indicated that telling the large company what to do is not right. Accordingly, it is not desirable to remove the organization when the problem occurs.”

In relation to a maintenance policy of a total amount limit system for investment, he said, “Because of this problem, there are many troubles in the normal business activities such as M&A, joint work with foreign companies, capital increase with consideration. This system must be abolished to develop properly in Korea. Only regulation of the total loan limits can be adequate for it.”

Besides, Mr. Son said for an election of the next president of FKI scheduled on February 6, “When members determine to recommend anyone as the president, it is expected that such a recommended candidate will accept its nomination.”

Keuk-In Bae bae2150@donga.com