The South Korean government will temporarily expand tax benefits to corporate investment, the finance minister said Monday, in the latest move to encourage business spending amid a slowing economy.
Hong Nam-ki, minister of economy and finance, made the comments in a consultative meeting with officials of the ruling Democratic Party.
Asia’s fourth-largest economy has been struggling to stimulate corporate investment, calling it a key to job creation.
Hong also said the tax benefits would also cover research and development spending on key industrial materials, parts and equipment, apparently as a means to reduce Korea’s reliance on Japanese materials and boost industrial competitiveness.
The move came as Japan imposed tighter regulations on exports to Korea of three materials -- resist, etching gas and fluorinated polyimide -- that are critical for the production of semiconductors and flexible displays. The restrictions reignited calls for efforts to push for localization of key industrial materials, components and equipment.
By Ram Garikipati and newswires (email@example.com)