Loosening Restrictions for Designating 30 Groups, Tax Deductions up to 10 Percent of Invested Money.

Government and three parties agreed on the loosening of the unnecessary business activity restrictions by changing the large-scale business group designation system, including 30 business group designation, which will be based on a certain level of assets, not determined by the order of assets.

However, there was no conclusion about the size of the tax reduction except a general consent that the tax system should be modified to alleviate the tax burdens onto people.

On August 10, Government and three parties announced the agreements with 13 items, after the economy policy discussion that was held on August 9 and 10 at Central Officials Training Institute, in Kwachun.

According to the agreements, group litigation will be introduced step by step but needs to be complemented not to discourage business activity. In addition, when there are business restriction rules in the name of Fair Trade Act, each rule will be appropriately modified in the spirit of the law. They decided to introduce a system of deducting 10 percent of the invested money for tax purpose in order to encourage business investments, which will also be applied to non-manufacturing businesses, as well as manufacturing businesses.

Also, they agreed on a special fundraising by mending the law of balanced area developments, a speedy review related to the law of banking user protection on hold for preventing people from banking losses (e.g. loansharking), and a reasonable review related to 5 working day system through Labor-Company-Government meeting.

While the Grand National Party proposed to alleviate 5 trillion won, including income tax and corporate tax, the Millennium Democratic Party and the United Liberal Democrats opposed to it, saying, ``Other than 10 percent reduction in income tax, the details about tax reduction should be discussed in a separate subcommittee composed of Government and Ruling and Opposition parties.``

They also failed to reach an agreement related to the alleviation of the progressive electricity rates.

Song In-Soo issong@donga.com