FKI: "Introduction of Domestic Production Tax Credit Will Be a Foothold for High-Tech Industry Competitiveness"

"Tax Support for Business Restructuring Expected to Revitalize the Petrochemical Industry"

The Federation of Korean Industries evaluated that the introduction of the domestic production tax credit, included in the government's 2026 tax reform plan, will serve as an opportunity to strengthen Korea’s manufacturing base and enhance the competitiveness of high-tech industries.

In a statement on August 3, Lee Sang-ho, Head of the Economic Division at the Federation of Korean Industries, said, “Amid continued internal and external challenges, such as geopolitical risks and weakening growth potential, this tax reform plan is expected to invigorate our economy and help secure future growth engines.”

Monument of the Korea Economic Association. Photo by Yonhap News Agency

He continued, “The introduction of the domestic production tax credit and the expansion of the scope for national strategic technology application will solidify the domestic manufacturing base and become a foothold for enhancing competitiveness in advanced technologies. In addition, tax support for business restructuring is expected to help restore vitality in the petrochemical industry.”

However, he pointed out that the strict requirements for the domestic production tax credit make it difficult for companies to utilize, and emphasized that further review is necessary.

He also expressed concern that narrowing the scope of the integrated employment tax credit may negatively affect the supply of quality jobs desired by the younger generation. He added that he hopes this will be addressed during the legislative process in the National Assembly.

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