Investment Tax Credits Extended Until Year-End

The government said Thursday that it will extend the term of the temporary capital investment tax credit until the end of the year. Seoul will also increase business investment assistance provided through government-owned banks in the second half of the year.

Deputy Prime Minister Jin Nyum said that the investment tax credit, which was to expire at the end of June, will be extended. The credit allows businesses to deduct 10 percent of funds invested in facilities against their tax liability.

The government will also allow businesses to claim the tax credit on interim tax payments to be made in August. "We expect the measure will mean a benefit of approximately 200 billion won ($155 million) for companies claiming the tax credit," said Mr. Jin, who is also the Minister of Finance and Economy. He said the program aims to encourage businesses to reinvest the tax savings in their operations.

The government also said it will increase again the funds available for capital investment assistance through the Korea Development Bank and the Industrial Bank of Korea. Money allocated for such assistance was increased by 28 percent, to a total of 8.8 trillion won, last month. Another increase will be made available in the second half.

Mr. Jin added that Seoul is drafting a bill to require corporations to maintain an internal audit system and protect employees who report accounting frauds.

by Kim Young-sae