Taxes cut in bid to lure firms back to GunsanThe North Jeolla provincial government announced Thursday that it has started providing an 85 percent discount on real estate acquisition tax for auto or shipbuilding industry manufacturers settling in Gunsan.
The move came as the provincial government looks to revitalize Gunsan, which has struggled in recent years from massive employment cuts and an economic downturn.
With the Thursday announcement, the city became the first area among nine special industrial crisis zones to provide a government-sponsored tax deduction program for companies. Gunsan was designated as a crisis zone in April last year, and the designation terminates in April 2020.
“We expect this acquisition tax discount to provide an opportunity in increasing the number of employed and recovering the regional economy of Gunsan that struggles from the closure of its automobile and shipbuilding industries,” said Shin Hyeon-seung, the administrative head of the North Jeolla government, in a statement.
By implementing an 85 percent discount in the real estate acquisition tax, North Jeolla anticipates 600 new jobs in the region by 2022 and up to 1,000 by 2025.
The once highly profitable region for the province has recently struggled after Hyundai Heavy Industries shut down its shipyard in Gunsan two years ago. More than 50 subcontracting companies closed their doors and around 5,000 workers lost their jobs.
Things only got worse when General Motors (GM) Korea closed its Gunsan plant in May last year and 1,200 out of 2,000 assembly line workers voluntarily retired. Contracts were terminated for 200 contracted employees and among the 600 remaining full-time employees who wished to stay, 200 were sent to work at other GM plants. The closure also resulted in 10,000 workers at subcontracting companies for the Gunsan auto plant losing their jobs.
A local auto parts supplier to Hyundai Motor Group, MS Autotech, announced Wednesday that it agreed to invest around 250 billion won ($215 million) to purchase the shuttered auto plant after signing an initial agreement in late March this year.
North Jeolla had promised to provide incentives like tax cuts for MS Autotech to settle in the region and start its operations.
BY KO JUN-TAE [email@example.com]