Members of the ruling and opposition parties on the National Assembly's Agriculture, Forestry, Fisheries, and Food Committee have jointly urged for an extension of the current "Agricultural and Fisheries Cooperatives Tax Special Provisions."
The Agriculture, Forestry, Fisheries, and Food Committee adopted a unanimous resolution at a plenary meeting on the 7th, titled "Resolution to Maintain the Current Status and Extend the Sunset Period of the Tax Exemption Deposit and Low Corporate Tax Rate Special Provisions for Agricultural and Fisheries Cooperatives."
The government had previously announced in its tax reform plan in July that starting next year, agricultural and fisheries cooperative members with total income exceeding 50 million won (comprehensive income 38 million won) would be excluded from the 30 million won limit for tax-exempt deposits. The corporate tax rate for agricultural and fisheries cooperatives was proposed to increase from 12% to 15% for taxable income exceeding 2 billion won.
The resolution adopted on this day evaluated the system's role, stating, "As of the end of 2024, the credit business deposits of agricultural and fisheries cooperatives amount to 508 trillion won, of which 257 trillion won (50.6%) are deposits from member candidates, and 61 trillion won (23.8%) of these are tax-exempt deposits, forming a stable borrowing base." It added, "This has been the foundation for generating profits in the credit business of agricultural and fisheries cooperatives, and these profits are reinvested in the circulation of agricultural and fishery products and support for farmers and fishermen, forming a virtuous cycle."
Regarding the low corporate tax rate, the resolution explained, "It is a rational system reflecting the public service function of agricultural and fisheries cooperatives." It noted, "Based on this, agricultural and fisheries cooperatives have supported farmer and fisherman return programs with 1.5453 trillion won and farmer and fisherman dividends with 1.1502 trillion won as of 2024, contributing to the development of agriculture, fisheries, and rural areas."
It further emphasized, "In the face of declining and aging agricultural and fishing populations and farm income remaining at 58% of urban workers' income, tax support is the minimum institutional basis for enhancing the sustainability of rural areas." It stressed, "Maintaining the current level of the system is not merely a tax benefit but a national duty to ensure the survival of rural areas and maintain regional economies."
The proposer of the resolution, Chairman Eo Ki-gu of the Agriculture, Forestry, Fisheries, and Food Committee, stated, "If the sunset period for the tax-exempt deposits and cooperative corporations of mutual financial institutions such as agricultural and fisheries cooperatives, scheduled to end this year, is not further extended, it will result in capital flight and reduced profits in mutual finance, leading to a reduction in various farmer and fisherman support programs and undermining the sustainability of rural areas..."