Establishment of Future Resilience Fund... A New Fiscal Framework with a Multi-purpose Fund Covering Semiconductors, Youth, and More

Incorporating the Additional Semiconductor Tax Revenue Fund into National Fiscal Management

With the official announcement of the establishment of the “Future Resilience Fund,” which will be financed by additional semiconductor tax revenue, the government is launching follow-up steps to set up the fund. This plan focuses on pooling the additional tax revenue into a dedicated fund for long-term operation, rather than using it for one-off fiscal expenditures, thereby transforming it into a sustainable source of investment capital. The Ministry of Planning and Budget, which is the lead agency, intends to prepare the legal basis—including methods of securing resources, operational principles, and target projects—through consultations with related ministries and the National Assembly, and to develop a new framework to integrate this into national fiscal management.

Yonhap News Agency

According to relevant ministries on July 6, the Ministry of Planning and Budget and the Ministry of Economy and Finance will unveil the blueprint for the newly established Future Resilience Fund in the economic growth strategy for the second half of the year, which is to be announced next week. Minister Park Honggeun of the Ministry of Planning and Budget stated on Facebook, following the official announcement by the party and government to create the Future Resilience Fund using additional semiconductor tax revenue, “As the minister in charge, I have reported the necessity and direction of the fund, and specific details will be prepared through close consultation with the relevant ministries and the National Assembly.” At the high-level party-government meeting held the previous day at the Prime Minister’s residence in Samcheong-dong, the party and government revealed their plan to use the additional tax revenue from the semiconductor boom as an investment resource for future generations by creating a separate fund. The government expects that, due to the semiconductor boom and the resulting increase in corporate tax and securities transaction tax revenues, approximately 50 trillion won in additional taxes will be collected this year (including 25.2 trillion won in the supplementary budget).

This initiative differs from previous cases in that it aims to pool excess tax revenue into a dedicated fund for long-term operation, rather than spending it on a one-time basis. While the fund is based on additional semiconductor tax revenue, its actual use is not limited to semiconductor investments. The scope will encompass three major mega-projects such as the Honam Semiconductor project, measures to address K-shaped polarization, support for youth housing and startups for 2030, the creation of growth engines for Korea, human capital, and investments for future generations. The goal is also to use the additional tax revenue to support the growth of advanced industries such as bio and aerospace at the regional level, in addition to semiconductors. Unlike existing funds, which are typically earmarked for relatively singular policy objectives, the Future Resilience Fund will combine functions such as growth investment, youth support, and economic stabilization, making its character fundamentally different.

An official from the government stated, “The Future Resilience Fund is intended to prevent the rapid depletion of additional tax revenue and simultaneously pursue investments for future generations and fiscal stability, giving it a multi-purpose nature. While existing funds generally bundle various projects within a single policy domain, the Future Resilience Fund will place different policy domains under one resource, representing a fundamental change in the structure of national fiscal management.” Under the current National Finance Act, the world surplus generated from excess tax revenue must be used in order for local allocation tax, local education finance grants, repayment of public funds, and repayment of national debt. To contribute to a separate fund like the Future Resilience Fund, the existing statutory expenditure order would need to be adjusted or a separate legal basis would be required. The Ministry of Planning and Budget is expected to pursue an amendment to the National Finance Act and enact a new law (tentatively titled the Act on the Establishment and Operation of the Future Resilience Fund) following discussions in the National Assembly.

Meanwhile, the government is also considering a plan to first accumulate the additional tax revenue in the Future Resilience Fund and then link it to a Korea-style sovereign wealth fund for investment in strategic industries. The Ministry of Economy and Finance had initially discussed creating a sovereign wealth fund of about 20 trillion won, using stakes in public enterprises as its base, and injecting the excess tax revenue into it. The Korea-style sovereign wealth fund currently being prepared by the Ministry of Economy and Finance is structured to make long-term investments in strategic industries such as semiconductors, AI, and bio, and to reinvest investment returns into future growth engines. Due to the record-breaking boom in semiconductors, the government, when announcing the supplementary budget plan at the end of March, raised this year's national tax revenue forecast by 25.2 trillion won, from 390.2 trillion won to 415.4 trillion won. However, given the outstanding performance of semiconductor companies such as Samsung Electronics and SK hynix, it is anticipated that the actual excess tax revenue could surpass these estimates. In May alone, corporate tax revenue was 700 billion won higher than the previous year, resulting in cumulative national tax revenue for January to May increasing by 27.5 trillion won (16%) year-on-year.

This content was produced with the assistance of AI translation services.