[EDITORIALS]Tax plans are a good startThe government has laid out an ambitious plan to become the economic hub of the Asia-Pacific region. Seoul will expand tax breaks for foreign companies and investors and will develop Yeongjong, Yongyu and Muui, areas near Incheon International Airport, into logistics centers for international airlines and a resort complex.
We do not disagree with the proposition that Korea must become a logistics and business hub in Northeast Asia, the third largest economic zone and one that accounts for 28 percent of all goods transported worldwide. But a country does not automatically become a hub simply by expanding roads, ports, and airports. The more convincing indicators will come when leading global companies start operations here and foreigners swarm to Korea.
The government's policy of tax breaks for foreigners and foreign companies is a good start. The government plans to give benefits to foreign investors who commit more than $10 million to investments in special economic zones and lower income taxes for foreigners by an average of 20 percent. Those initiatives will certainly appeal to foreign companies.
"Reverse-discrimination" claims by Koreans may well be raised, but foreigners compare Korea with other Asian countries as an investment venue.
Judging from the government plans, tax benefits for foreign companies will be comparable to those in China or Malaysia, but will still lag behind those in Singapore and Hong Kong. We hope more rational adjustments be made on the policies during the legislative cycle, taking into account competing nations' policies to lure foreign businesses.
Development plans in the special economic zones in the Seoul metropolitan area, such as Songdo island, areas near Incheon International Airport and the reclaimed land in Gimpo should include environmental, educational and cultural elements. Labor relations and language problems must also be considered. We are concerned that the lame-duck government will have little time to push ahead with its plans. But it was a choice that will determine the future of Korea. Bipartisan support and cooperation in the project is necessary.