South Korea's passion for education is second to none in the world, and deep within our citizens lies a strong determination that "any road will do, as long as it leads to Seoul." So what makes people want to stay in the Seoul metropolitan area? Undoubtedly, it is because everything is concentrated there. Prestigious universities, general hospitals, transportation networks, and all other infrastructure for education, medical care, culture, and transport are equipped at the highest level. In contrast, non-metropolitan regions suffer from the double burden of infrastructure gaps and population decline. As the concentration of resources in the metropolitan area has accelerated, regional competitiveness has deteriorated, leading to the outflow of young people and labor shortages in a continuing vicious cycle. Most areas at risk of extinction are non-metropolitan, and regional imbalances have now moved beyond simple disparities to a level that threatens the nation's very existence.
Currently, all of South Korea's nutrients are concentrated in the head (the metropolitan area), while the arms and legs (the regions) that should support the body are on the verge of collapsing from malnutrition. The head itself suffers from hypertension (low birth rates and high housing costs) caused by overcrowding, while the hands and feet (regional universities and industries) have long experienced numbness due to poor blood circulation. The body of South Korea can only be maintained properly when blood circulates smoothly from head to toe. The situation in Gumi, North Gyeongsang Province—once home to the Samsung Electronics Anycall legend—is even more stark. Gumi, the largest inland export base that once accounted for a double-digit share of South Korea's exports, is losing its former glory due to large corporations' overseas production and the concentration in the metropolitan area, but it is staking everything on another leap forward. Amid this reality, it is urgent to establish policy and institutional mechanisms to ease metropolitan concentration and supply nutrients to the regions. In other words, incentives must be devised to attract businesses and workers to regions where living conditions and infrastructure are relatively poor.
Accordingly, the chambers of commerce and industry councils of North Gyeongsang, South Gyeongsang, North Jeolla, and South Jeolla launched the Non-Metropolitan Chambers of Commerce and Industry Council and commissioned research on a "Tax Reform Plan with Differential Application for Non-Metropolitan Areas." In November last year, they held a "Tax Reform Discussion for Balanced National Development" at the National Assembly Library, building social consensus for legislation. Based on this, in February this year, Rep. Koo Ja-keun of the People Power Party and Rep. Heo Seong-mu of the Democratic Party of Korea jointly proposed "Partial Amendments to the Corporate Tax Act, Local Tax Act, and Restriction of Special Taxation Act." The core of the bill is to lower the corporate tax rate and local corporate tax rate by 3 percentage points each for small and medium-sized enterprises based in non-metropolitan areas, and to reduce 50% of earned income tax (up to 5 million won per year) for workers employed at non-metropolitan companies through the end of 2030. This demands substantive tax benefits to encourage inflows to the regions, as the difficulties of regional economies are not matters for individual companies but a national crisis. Rather than strengthening regulations on the metropolitan area, the goal is to create an institutionally favorable environment for companies and workers who choose non-metropolitan areas as quickly as possible.
Reflecting this urgency, the Non-Metropolitan Chambers of Commerce and Industry Council, together with the offices of Reps. Jeong Tae-ho, Park Soo-young, Koo Ja-keun, and Heo Seong-mu, will jointly host the "Non-Metropolitan Tax Reform Forum for Balanced National Development" at the National Assembly on the 29th of this month, under the theme "The Legitimacy of Tax Transformation Realized Through Balanced National Growth." We hope that the earnest voices of the regions conveyed by the Non-Metropolitan Chambers of Commerce and Industry will bear fruit in legislation, and we earnestly wish that South Korea will break away from being a metropolitan republic and become a country where it is good to live and do business anywhere.
