Yongin mayor warns Gyeonggi Province against taking cities' corporate local income tax to cover fiscal deficit

Lee Sang-il, mayor of Yongin Special City, said Monday that Gyeonggi Province's plan to pool half of the corporate local income tax collected by its 31 cities and counties into a shared revenue source — to cover the province's fiscal deficit — would face strong resistance from those municipalities. He made the remarks during an appearance on the OBS morning program "Kim Jun-ho's Good Morning OBS."

Lee also said he visited Danang, Vietnam — a sister city of Yongin — from Aug. 4 to Aug. 8 to inspect the operations of a smart library the city built as part of an official development assistance project. During the visit, he presented Yongin's semiconductor project and AI policy at a conference titled "Meeting with Korea: AI as a New Engine of Growth and Development," drawing a strong response, he said.

Lee also highlighted several other city achievements during the program: the successful hosting of the third National University Theater Festival, which he said has positioned Yongin as a hub for collegiate theater; and a self-reliance work program using the city's mascot character "Joayong," whose strong results have prompted local governments across the country to visit Yongin as a model.

Asked by the host for his view on Gyeonggi Province's corporate local income tax pooling plan, Lee said Governor Choo Mi-ae had described the province's 7 trillion won ($4.93 billion) fiscal deficit as an emergency, but added that the nature of the debt and its repayment timeline needed to be examined carefully. "Gyeonggi Province's fiscal situation deteriorated because of the many cash-benefit support programs it ran during the seventh and eighth elected terms," Lee said. "Rather than fixing that through expenditure restructuring, the province is trying to take half of the corporate local income tax from 31 cities and counties — and that will provoke strong pushback from those municipalities."

Lee said that for many of Gyeonggi Province's cash-benefit programs, cities and counties bear as much as 70 percent of the total project cost. "The province gets the credit while the burden falls on the cities and counties," he said. "All of these policies need to be thoroughly reviewed."

On securing its own revenue, Lee said Gyeonggi Province should work with the central government to convert its status from a non-grant recipient to a grant recipient, enabling it to build an independent tax base.