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Crossed wires


“The government does not have a plan to raise the tax rate on diesel,” said Choi Young-rok, head of the taxation department at the Ministry of Strategy and Finance on June 26.

“Overall diesel consumption should be lowered in a few steps,” said Kim Jin-pyo, chairman of the advisory committee for planning for the Moon Jae-in administration, on July 6.

In the span of ten days, high-level government officials made two very different remarks. The official announcement of the head of the taxation department at the ministry was reversed by the head of the advisory committee for the administration, which serves as the transition team for the new government.

In the two months since the start of the Moon administration, there have been a few offbeat moves between government ministries and the advisory committee. Kim mentioned a two-year deferment for imposing taxes on religious people, which would take effect next year. But the Ministry of Strategy and Finance and the National Tax Service are getting ready for the enforcement as scheduled and arranging meetings with the religious leaders.

Moreover, Kim said that various policies to share the central government’s fiscal authorities with local governments would be pursued. It means that the current ratio of federal to local taxes, 8 to 2, would be changed to 6 to 4. On the issue, Vice Prime Minister and Minister of Finance Kim Dong-yeon is cautious. He said he would need to review the overall fiscal structure.

Some are concerned that the dissonance may be structural. The Moon administration’s economic team is made of a few career economic officials, including Vice Prime Minister Kim, and newcomers. Their collaboration could bring great synergy, but discord could also result. Baek Woong-ki, a senior economist at the Korea Development Institute, said, “Coordinating with the Blue House policy team is homework for Vice Prime Minister Kim.”

Regarding the concerns, the government emphasized it would work as “one team” and have “one voice.” Vice Prime Minister Kim, Blue House Policy Chief Chang Ha-sung and Fair Trade Commission Chairman Kim Sang-jo met for the first time on June 21. Chang said, “Of course, the vice prime minister will lead the economic vision and planning.” Now, Kim is officially in charge of economic issues.

The promise should not become empty. If the advisory committee does not support the government’s official announcements, government policies become less reliable. When policies are not stable, the victims are those working in the field and ordinary citizens. People are wondering what the government plans to do with the tax on diesel. The economic team needs to continue intense debate over current issues. However, in the process, unfiltered voices should not be leaked outside.

JoongAng Ilbo, July 10, Page 29

*The author is a business news reporter of the JoongAng Ilbo.

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