Presidential chief of staff backs tax windfall for chip projects

Presidential Chief of Staff Kang Hoon-sik said Sunday that additional tax revenue generated by the semiconductor industry's boom should be invested in expanding power and water infrastructure for chip clusters, arguing that the proceeds could help finance the government's three flagship "mega projects."

In an interview with The Dong-A Ilbo at his office, Kang discussed plans to secure power and water supplies for a proposed semiconductor cluster in the Honam region. "We have to consider every option, including nuclear power," he said. "Building a nuclear power plant usually takes seven to nine years, so we also need to look at ways to accelerate the process." He also called for a significant expansion of renewable energy storage facilities and pumped-storage hydropower. "The real question is where the funding will come from," he said, adding that additional tax revenue generated by the semiconductor industry should be used for the purpose. Earlier in the day, Kang told a high-level policy meeting between the government and the ruling Democratic Party of Korea that the administration would pursue the creation of a Future Response Fund to invest additional tax revenue in projects aimed at benefiting future generations.

Kang said the government's three mega projects embody the defining policy visions of past presidents. He cited former President Park Chung-hee's industrialization drive, former President Kim Dae-jung's vision for the digital era, former President Roh Moo-hyun's commitment to balanced regional development and former President Moon Jae-in's push to expand renewable energy.

Turning to property holding tax reform, Kang said President Lee Jae-myung will personally lead a public policy forum on real estate later this month to seek public input on multiple government proposals. "We'll lay every option on the table, taking into account taxation, interest rates, housing supply and other market conditions, and discuss them with the public," he said. "Property holding tax rates and the threshold for ultra-high-value homes will all be part of the discussion."

With the ruling Democratic Party of Korea preparing for its Aug. 17 national convention, Kang also spoke about relations between the administration and the party as Lee enters his second year in office. He said the goal is to create a partnership in which the government and the ruling party work together, deliver results together and take joint responsibility for those results.


Hoon-Sang Park tigermask@donga.com