Jeonbuk Innovation Party “The facade of local autonomy without finances… The local allocation tax formula must be changed”

(Jeonju = Yonhap News) Reporter Lim Chae-du = The Jeonbuk Special Self-Governing Province Party of the Fatherland Innovation Party emphasized on the 19th, "We must maintain the current calculation method of local allocation tax and first guarantee the local government's statutory share and financial autonomy before creating a future response fund."

The provincial party stated this at a press conference held at the Jeonbuk Provincial Council on this day, saying, “Local autonomy without finance is nothing more than a facade.”

While preparing next year's budget, the government decided to establish a new future response fund worth 162 trillion won. It also decided to use additional tax revenue to finance the fund and adjust local allocation tax parameters.

Concerns are rising among local governments that this may result in a decrease in local allocation taxes.

According to the provincial party, the government plans to first deduct the amount transferred to the Future Response Fund and then apply 19.24% to the remaining domestic taxes to calculate the local allocation tax.

The provincial party claims that if the government's plan is followed, next year's fixed-rate local allocation tax will be calculated nationwide by about 30.5 trillion won less than if the current formula was maintained.

There were concerns that the allocated taxes of Jeonbuk-do and 14 cities and counties would also decrease by approximately 2.7235 trillion won.

The provincial party added, “When tax revenue decreases, the pain should be shared with local governments, and when tax revenue increases, the central government should take the first step,” adding, “The contradiction of the central government with expansionary finances and local governments with austerity finances must not be neglected.”

In addition, he said, “The place that will be most affected by the government’s plan is Jeonbuk, which is highly dependent on local allocation taxes,” and requested the government to “establish a separate account for special self-governing provinces that reflects the administrative and financial needs of special self-governing provinces in the local allocation tax distribution system.”