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President says will be no tax hike for low-income firms, people

President Moon Jae-in said Friday that a tax hike was inevitable to fund the new government's 100 policy tasks but that there will be no tax increase for average citizens or small and medium-sized enterprises (SMEs).

"Initially, the ways to fund the policy tasks included a tax increase, but we have been unable to set the scope or direction of the tax hike," the president said in a meeting with over 200 policymakers from the government and the ruling party to discuss ways to finance his policy objectives.

"It is now time to decide. But even if we raise tax, it will affect only the highest income-earners and the largest conglomerates," Moon said, according to his spokesman Park Soo-hyun.

"There will be no tax increase for the middle-class, ordinary citizens or SMEs. That is the direction (of the tax policy) that will continue over the next five years," he added.

The two-day meeting on financial strategies began Thursday, one day after Moon's de facto transition team introduced five major policy objectives for the new government in its final report, along with 100 policy tasks to achieve the goals.

The team, the State Affairs Planning Advisory Committee, noted the 100 tasks alone may cost an additional 178 trillion won (US$159.1 billion) in government spending over the 2018-2022 period, adding at least some 82 trillion won will have to come from a rise in tax revenues.

Park earlier said the government will begin discussing ways to fund the new policy initiatives next week.

The president noted his government, as well as its new policy initiatives, may still be open to a change.

For instance, there existed criticism that he was pushing to shut down all nuclear power plants with haste as if executing a military mission, he noted.

He, however, said the newest nuclear reactor that recently went into operation had a designed lifespan of 60 years.

"This alone means nuclear reactors will be operational until 2079. It will not make any sense if we say we cannot afford to gradually reduce (the number of nuclear reactors) over the next 60 years," he said, according to Park.