President Lee Jae Myung speaks at a briefing on the "7 SEED" future growth engines held at Cheong Wa Dae on Wednesday. [Yonhap]
President Lee Jae Myung speaks at a briefing on the "7 SEED" future growth engines held at Cheong Wa Dae on Wednesday. [Yonhap]

President Lee Jae Myung on Thursday defended the government's overhaul of the family business inheritance deduction, saying "reducing unjustified tax breaks is the path to tax normalization" and questioning whether it was fair to continue granting hundreds of millions of won in inheritance tax exemptions to businesses such as taxi and bus operators, supermarkets, hospitals and pharmacies.

Lee shared a news article on X, formerly Twitter, reporting growing criticism of the inheritance deduction reform, and posted the remarks alongside it.

The family business succession deduction was originally designed to prevent business owners from abandoning their companies due to the burden of inheritance taxes. As the scope of eligible businesses expanded over time, however, loopholes emerged and calls for reform grew.

The Ministry of Economy and Finance responded with a sweeping revision of the eligibility criteria, dropping sectors such as taxi and bus transport, supermarkets, hospitals and pharmacies from the deduction. Lee's comments were a direct rebuttal to the backlash that followed, reiterating that scaling back unwarranted exemptions amounted to restoring tax fairness.

Meanwhile, at a Cabinet meeting on Tuesday, Lee said it would be "desirable to accept counterarguments" raised during the public comment period on the tax reform package currently under legislative notice.

With public opinion divided over the proposed tax changes, his remarks were widely interpreted as leaving open the possibility that the package could be adjusted based on feedback gathered before the legislative notice period closes on Thursday, Aug. 20.


sunpine@heraldcorp.com