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Opposition party: ‘Collect windfall tax from oil firms to pay for heating’

Opposition party: ‘Collect windfall tax from oil firms to pay for heating’

Posted January. 28, 2023 07:43,   

Updated January. 28, 2023 07:43


The main opposition Democratic Party is demanding the introduction of a ‘windfall tax’ despite opposition by the government. The party is suggesting the government collect a separate tax from oil refiners that have earned profits due to high oil prices and use the funds to provide heating cost subsidies and support low-income households and the self-employed. The ruling opposition objected to the demand, saying, “The Democratic Party is ignorant of market capitalism.”

“The public is suffering heavily due to inflation across the board, including heating costs. We have to put in place a measure to invite ultra-large companies that raked in astronomical operating profits while benefiting from recent tax cuts to participate in a campaign to overcome the crisis,” Democratic Party leader Lee Jae-myung said at an onsite meeting of its key leaders, which took place in North Jeolla Province Friday. “The National Assembly and companies should seek a method, be it a windfall tax or donation for the coalition.” In an interview with MBC radio, the party’s policy committee chair Kim Sung-hwan said, “It would be the right thing to do for the top four Korean oil companies to share the pain and burden of others as they earned astronomical amounts of profit. There is already a law similar to a windfall tax, and hence we don’t need to enact a separate act and steal their profits.”

However, mentioning suspicions surrounding the Daejang-dong and Baekheon-dong redevelopment projects in Seongnam City, Gyeonggi Province, involving Lee as its former mayor, the People’s Power Party countered the claims, saying, “It is none other than Lee himself who has to pay a windfall tax.” The ruling party’s policy committee chair Sung Il-jong told a meeting of the party, As (Lee) is making irrational demands to set aside an extra budget worth 30 trillion won (24 billion dollars) to cover up legal risks involving Lee himself, the opposition party has come up with this irrational idea of a windfall tax. It is logic typical of the Democratic Party that has been driving a wedge between companies and the public.” Deputy prime minister for economy Choo Kyung-ho also said, “We can never agree to the idea and are never considering it. If companies make profits, they pay tax through corporate income tax.”

The People’s Power Party has reiterated its decision to reject an extra budget. “As if it was not sufficient for (the opposition party) to hand the Korean people 1,000 trillion won (810 billion US dollars) in national debts by irresponsibly handling state administration for five years (during Moon Jae-in administration), the party is now demanding an extra budget to lavishly give away money once more,” its floor leader Joo Ho-young said. “If you have any sense of responsibility and conscience, please stop making demand for borrowing loans and easing fiscal policy again.”

Hoon-Sang Park tigermask@donga.com