Government discusses domestic production tax credit revisions, reviews 3 key social policies

The government discussed ways to refine its domestic production tax credit system and reviewed plans to advance three key social policies covering housing, employment and financial support for low-income households.

The Ministry of Economy and Finance said Sunday that Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il chaired an economic affairs meeting to examine those issues.

The meeting was attended by Minister of Trade, Industry and Energy Kim Jung-kwan; Minister of Climate, Environment and Energy Kim Sung-hwan; Minister of SMEs and Startups Lee So-young; Minister of Planning and Budget Park Hong-keun; FSC Chairman Lee Eok-won; Moon Shin-hak, senior presidential secretary for economic growth; and Ryu Deok-hyeon, fiscal planning adviser.

The domestic production tax credit is a system that reduces tax burdens based on domestic production performance. The government announced plans to introduce it as part of a tax reform package in August, with solar and wind power, secondary batteries, semiconductors, key materials, and AI robot components among the initially proposed eligible sectors.

However, the exclusion of some industries — including electric vehicles — has drawn calls from the business community to expand the scope of tax support.

The meeting also took up housing, employment and low-income financial support policies aimed at easing polarization and reducing inequality — three areas the government has designated as priority social policy initiatives.

The Ministry of Economy and Finance said it plans to hold follow-up consultations with relevant ministries, gather a range of opinions and then finalize the government's position.