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[Bills in Focus] 'Shrinkflation' warnings, tax benefits for tech investment

By Korea Herald

Published : Feb. 5, 2024 - 14:00

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Proposed Bill: Partial Amendment to the Act on Labeling and Advertising of Foods

Proposed by Rep. Park Dae-chul (People Power Party)

● Food manufacturing companies have begun to reduce product volume or alter ingredient content in response to rising prices. To ensure consumers are informed of such changes, this amendment requires companies to indicate changes in product volumes or content on the packaging.

Proposed Bill: Partial Amendment to the Act on Restriction on Special Cases Concerning Taxation

Proposed by Rep. Kim Hack-yong (People Power Party)

● The Act on Restriction on Special Cases Concerning Taxation, known as the K-Chips Act, gives bigger tax incentives to chipmakers and other strategic businesses. It centers on expanding the tax credit rate for companies that make facility investments in national strategic industries, including those related to semiconductors, secondary batteries and future cars, with key provisions increasing the tax credit rate for large companies extending to 15 percent, and for small and medium-sized businesses to 25 percent on their investments made by 2024. Considering the growth outlook of South Korea’s economy, this amendment extends the expiration period of the tax credits for investments in national strategic technologies by an additional six years.

Pending Bill: Partial Amendment to the Serious Accidents Punishment Act

Proposed by Rep. Lim Lee-ja (People Power Party)

● The Serious Accidents Punishment Act holds employers liable for serious industrial accidents, and employers could face at least one year in prison or fines of up to 1 billion won ($749,000) in the event of a fatal workplace accident. It expanded to apply to small and medium-sized businesses with 50 employees or less from Jan. 27. However, due to the lack of human resources and funds, it is more difficult for SMEs to comply with the SAPA. As this could lead to an increase in law-violating businesses and bankruptcies, this amendment postpones the SAPA application to businesses with fewer than 50 employees for an additional two years.

Promulgated Bill: Financial Investment Services and Capital Markets Act

Competent Authority: Financial Services Commission

● This bill imposes a penalty surcharge on individuals who engage in unfair trading practices, such as market price manipulation. It prescribes the penalty surcharge to be within a range not exceeding twice the amount of profit earned by such practices and sets the maximum penalty for cases where the profit is difficult to calculate to 4 billion won.

Administrative Announcement: Partial Amendment to the Enforcement Decree of the Radio Waves Act

Competent Authority: Ministry of Science and ICT

● This amendment improves the radio station inspection system, allowing inspection date adjustments. Accordingly, it is possible to adjust the regular inspection time of the radio station installed in the same place or the radio station operated by the same facility to the same time. Radio station inspection is a procedure to check whether wireless communication facilities use radio waves stably without confusing other terminals and equipment. Previously, even equipment installed in the same place had to be inspected at different times each time, resulting waste of administrative power for the government and companies.

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The Korea Herald republishes a weekly legislative report by local law firm DR & AJU LLC to provide the latest information on bills approved, proposed, pending and set to be promulgated. -- Ed.

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For any queries about the bills, contact cr@draju.com.