Lee calls for flexible, humble mindset in tax reform and ministerial debate on 'megaprojects'

President Lee Jae Myung urged Finance Minister Koo Yun-cheol, who is overseeing the government’s tax reform plan, to stay humble and flexible in the face of inevitable criticism over tax policy.

“Anyone who tinkers with taxes is bound to face criticism when they change the system,” Lee said during a Cabinet meeting held at the Sejong Government Complex on Tuesday. “Those who benefit from the changes tend to stay quiet, while those who end up shouldering a greater burden become fiercely opposed. So, keep your head up no matter what.”

The remarks came as Lee pushed back against opposition and media criticism of the tax reform plan unveiled on Aug. 3, which centers on higher taxes for apartment owners who do not live in their properties and scaling back financial incentives given to the conventional individual savings account (ISA), an account with tax advantages that lets holders pool various financial products.

Following backlash from young people who complained that it would reduce benefits available through the account, Lee ordered a full review of the ISA-related plan on Friday. What came after was criticism that the government was resorting to “patchwork” fixes.

“Policies are policies because there is room for debate and differing views. If something is indisputable and self-evident, then it is a fact,” he said. “When we put forward a proposal, we do not intend to simply push it through unchanged. It is always open to revision.”

“Is sticking with a decision simply because it has already been made really what we mean by consistency?” Lee said. “If people say moving forward is wrong, moving backward is wrong and even standing still is wrong, then what are we supposed to do? That's when they simply dislike your very existence. I hope we can move away from that.”

The president also welcomed the debate between the industry and labor ministries over whether researchers should be exempt from the 52-hour workweek, which he labeled a “democratic process.”

The discord emerged during discussions on the “megaspecial zone act,” a potentially legal basis for nurturing a chip cluster in the Jeolla region. The Ministry of Trade, Industry and Resources called for exempting semiconductor researchers from the 52-hour workweek, while the Ministry of Employment and Labor insisted that the limit remain in place.

“The reason I appointed a labor minister from the [progressive] Korean Confederation of Trade Unions and an industry minister who was formerly a corporate executive was to have them openly challenge each other’s views,” Lee said. “There is nothing wrong with ministries holding different views, and such discrepancies should not be portrayed as a problem. Cabinet members should debate and work through their differences so the public does not have to.”

The president also urged a comprehensive, coordinated effort between ministries to eliminate outdated practices and obstacles that could delay investment in three state-led "megaprojects" for chips, AI data centers and physical AI.

“Ministries and local governments must work together to boldly overhaul outdated practices, streamline unnecessary procedures and proactively remove obstacles to early investment.”

Industry Minister Kim Jung-Kwan set 2029 as the target for the initial completion of chip fabrication plant construction in the Jeolla region.

“We will accelerate plans for the national industrial complex, with the Ministry of Land, Infrastructure and Transport at the center of the effort,” Kim said.

Construction is expected to begin as soon as the Gwangju military air base is relocated in the second half of 2028. The government currently pictures a scenario in which the semiconductor fabrication plant begins operations as early as 2029.

The Cabinet meeting also covered the Ministry of Health and Welfare’s suicide prevention efforts, which include government-wide initiatives.

“Protecting people’s lives must come before everything else the government does,” Lee said.

The president subsequently stressed measures including aggressive debt relief for chronically delinquent borrowers by the Financial Services Commission, reforms to the basic pension system by the Health Ministry that would provide greater support to those with less and the compilation of statistics and policy measures by the National Police Agency concerning deaths resulting from crime.

“Lenders also bear responsibility when they extend excessive credit without properly assessing a borrower’s ability to repay,” Lee said.

He also addressed public concerns over police misconduct. 

“Investigations have recently become a major source of public concern, and the police now bear greater responsibility,” Lee said. “I want a comprehensive review of how we respond to crime victims, along with a report outlining measures to address the issue.”

Lee also stressed proactive governance. He pressed the government for clearer rules on what constitutes a legitimate subject of a labor dispute under the “Yellow Envelope” act. The president also dismissed the labor minister’s remarks that the ministry had already addressed the issue through administrative interpretations because the law did not explicitly delegate it authority to set further rules.

“Laying out the details needed to implement a law is a constitutional authority of the executive branch, even without an explicit delegation from the law,” Lee said.

Tuesday’s meeting marked the fourth time Lee has held a Cabinet meeting in Sejong, following meetings there on Sept. 16 and Dec. 16 last year and March 17 this year.

“Sejong symbolizes balanced regional development, and we must firmly establish it as the true center of national governance," Lee said. "We need to accelerate construction of the presidential office and the National Assembly complex in Sejong while ensuring that the necessary infrastructure is put in place without delay. We should make every effort to open the Sejong presidential office within our term, with the determination to hold our administration’s final Cabinet meeting there.”

BY HA JUN-HO [lee.soojung1@joongang.co.kr]