Economy - The Korea Times

Watchdog moves to revamp bonus schemes across finance sector amid public outcry

The Financial Supervisory Service (FSS) pledged to address short-term-focused incentive structures prevalent in the financial sector, warning that these practices could undermine the health of individual firms and threaten the stability of the broader financial system, officials said Thursday. The comments came as the financial watchdog conducted a review of performance-based compensation systems across the financial sector. The review follows criticism that executives and employees received excessive bonuses despite growing concerns over the financial soundness of institutions amid rising defaults in real estate project financing and other issues. According to the FSS, several institutions were found to be only nominally deferring performance bonuses or operating without clear criteria for adjusting or reclaiming them. The watchdog noted that total performance-based bonuses awarded for 2023 amounted to 1.06 trillion won ($761 million), down 8.8 percent from 1.17 trillion won in 2022. The average bonus per employee in 2023 was 139 million won. By position, CEOs received an average of 380

May 15, 2025By Jun Ji-hye

Watchdog moves to revamp bonus schemes across finance sector amid public outcry

Gov't announces additional support for exporters amid continued US tariff concerns

The government on Wednesday announced a set of additional support measures for small and medium-sized domestic exporters expected to be impacted by new U.S. tariffs, citing continued uncertainty in the global trade environment. "Despite yesterday's tariff agreement between the United States and China, global trade conditions are still marked by considerable uncertainty," acting Finance Minister Kim Beom-suk said during a meeting with economy-related ministers. The announcement follows high-level negotiations held in Geneva, Switzerland, on Tuesday (local time), where Washington and Beijing reached a temporary agreement to ease tariffs for a 90-day period. Under the deal, U.S. tariffs on Chinese goods will be reduced from 145 percent to 30 percent starting Wednesday, while China will cut tariffs on U.S. exports from 125 percent to 10 percent. In response to new U.S. tariffs, including 25 percent country-specific duties on Korea that are temporarily lowered to 10 percent until early July, the Korean government has introduced a series of measures aimed at easing the burden on affected dome

May 14, 2025By Yonhap

Gov't announces additional support for exporters amid continued US tariff concerns

Could BOK be exempt from corporate tax under new administration?

There has been renewed interest in whether a bill exempting the Bank of Korea (BOK) from corporate tax could pass under the new administration next month, according to financial industry officials and politicians on Tuesday. Supporters of the bill argue that the exemption is necessary to eliminate the central bank’s double taxation structure and to strengthen its independence. Yun Ho-jung, chief of the Democratic Party of Korea’s (DPK) election campaign committee, noted Tuesday that discussions on the bill are likely to resume along with other pending legislation after the June 3 presidential election and the return to regular parliamentary proceedings. “It is necessary to address the central bank’s double taxation issue and enhance its institutional independence,” Yun said. In February, Yun submitted bills to amend the Bank of Korea Act and other related laws in a bid to exempt the central bank from corporate tax. Yun criticized the current system, under which the BOK, despite being a state-run entity established without capital to carry out monetary and credit policies, is sti

May 13, 2025By Jun Ji-hye

Could BOK be exempt from corporate tax under new administration?

No more 'no Japan'? Lee Jae-myung pledges stronger Seoul-Tokyo economic ties

Stronger economic cooperation with Japan has emerged as an unexpected presidential election pledge by Rep. Lee Jae-myung, the candidate from the Democratic Party of Korea (DPK). The liberal party has typically taken a more hostile stance on the island country compared to its conservative rival, the People Power Party. Broadly seen as anti-Japan but friendly to China, Lee recently extended an olive branch to Japan, as the Seoul-Tokyo partnership is increasingly seen as essential to counter Washington's protectionist trade policies. The current front-runner in the presidential race said Thursday that he "completely agrees" with SK Group and Korea Chamber of Commerce and Industry Chairman Chey Tae-won's proposal for economic solidarity with Japan to counter global "rule-setters" like the United States and China. Amid the intensifying trade war between the world's two largest economies, Chey has repeatedly urged policymakers to consider forming an Asian economic bloc similar to the European Union by joining hands with Japan and Southeast Asian nations. "I agree with the need for country-lev

May 11, 2025By Park Jae-hyuk

No more 'no Japan'? Lee Jae-myung pledges stronger Seoul-Tokyo economic ties

Korea to launch QR code payment service in Indonesia

Korea will launch an easy-to-use QR code payment service in Indonesia this year, as part of efforts to foster its advanced digital financial services in Asia, according to the head of the Korea Financial Telecommunications & Clearings Institute (KFTC), Thursday. Operating under the wing of the Bank of Korea (BOK), the KFTC is tasked with supporting efficient financial transactions across the relevant industries. KFTC President Park Jong-seok, who accompanied BOK Gov. Rhee Chang-yong at the Asian Development Bank (ADB) meeting in Milan this week, highlighted Indonesia as the first partner country in Asia for a QR code payment system. “We expect the service to start in Indonesia within this year, as we push to elevate the KFTC’s reputation and promote Korea's advanced financial system across Asia,” Park told reporters. The QR code payment service will be part of the KFTC's broader goal to establish a linked network among Korean financial services companies, including fintech firms, and overseas payment institutions. In particular, the institute seeks to build the network without using

May 9, 2025By Yi Whan-woo

Korea to launch QR code payment service in Indonesia

Korea introduces counter-tax evasion system using AI in Latin America-led meeting

National Tax Service (NTS) Commissioner Kang Min-su introduced Korea’s advanced system using artificial intelligence (AI) to crack down on tax evasion during a meeting of top tax officials mostly from Latin American countries, the NTS said Thursday. The tax agency said Kang was a special guest at the 59th general assembly of the Inter-American Center of Tax Administrations (CIAT) in Santiago, Chile, from Tuesday to Thursday. The center discussed tax authorities’ responsibility to respond to tax-related crimes among its 40 member states and relevant international organizations. Over 30 CIAT member states are from Latin America, while the United States, Canada and some countries from Europe, Africa and Asia are also part of the group. Kang highlighted Korea’s yearslong efforts to build a secure, reliable electronic tax administration, which grew large enough to amass big data and evolved to be used as a resource for an AI system aimed at detecting any attempts to dodge taxes. In particular, he addressed an AI-driven scientific approach to pinpoint targets for tax audits and verify whe

May 8, 2025By Yi Whan-woo

Korea introduces counter-tax evasion system using AI in Latin America-led meeting

Gov't to execute 70% of extra budget within 3 months to support economy

The government will execute 70 percent of the recently passed 13.8 trillion-won ($9.9 billion) extra budget within three months to boost the local economy and support export companies amid global trade uncertainties, the finance ministry said Thursday. The Ministry of Economy and Finance announced the plan at a meeting of economy-related ministers, saying the swift execution is aimed at maximizing the impact of fiscal spending. The extra budget, approved by the National Assembly last week, includes some 400 billion won for the issuance of local currency vouchers to help small merchants and 89.8 billion won worth of vouchers for export firms ailing amid global trade protectionism sparked by the U.S. administration's tariff scheme. With the execution, companies will be able to start using export vouchers worth a combined 178.6 billion won in June and a new 4 trillion-won low-interest loan program later this month. Small merchants will become eligible for up to 500,000 won in support to cover utility and insurance bills in July, according to the ministry. To enhance Korea's artificial intell

May 8, 2025By Yonhap

Gov't to execute 70% of extra budget within 3 months to support economy

Korea’s global economic outreach at risk as top policymakers quits

Former Economy and Finance Minister Choi Sang-mok had been at the forefront of safeguarding Korea’s external credibility following former President Yoon Suk Yeol’s Dec. 3 martial law declaration and has played a key role in ongoing tariff negotiations with the U.S. His abrupt resignation on Thursday amid threats of impeachment from the National Assembly has fueled growing concern among market watchers over Korea's future global economic outreach. As of 12:00 a.m. Friday, the Ministry of Economy and Finance transitioned to an acting leadership system, with First Vice Minister Kim Beom-seok assuming the role of acting deputy prime minister and finance minister. "It is unfortunate that Choi had to step down due to the impeachment motion," Kim said Friday during a meeting with Korea’s top four financial leaders. "We will activate a 24-hour emergency response system to minimize the impact of heightened political uncertainty on the financial and foreign exchange markets." Choi’s departure comes at a particularly vulnerable time, as Korea faces growing pressure over U.S. tariffs. He had

May 2, 2025By Lee Yeon-woo

Korea’s global economic outreach at risk as top policymakers quits

National Assembly passes $9.6 billion extra budget bill

The National Assembly on Thursday passed a 13.8 trillion won ($9.6 billion) extra budget aimed at helping disaster response efforts and revitalizing the economy. The bill was approved in a plenary session after the Democratic Party of Korea (DPK) and the People Power Party added 1.6 trillion won to the 12.2 trillion won proposed by the government. The extra budget allocates 400 billion won for the issuance of local currency vouchers, which is far less than the 1 trillion won initially pushed by the DPK, to help small merchants and the self-employed. On livelihood spending, 170 billion won was added to provide discounts on agricultural, livestock and fisheries products to stabilize prices, while the budget for university scholarships increased by 115.7 billion won. Another 30 billion won was earmarked for flood prevention efforts ahead of the summer season. It also includes the previously cut funds for special activity expenses for the prosecution and the state audit agency. (Yonhap)

May 1, 2025By Yonhap

National Assembly passes $9.6 billion extra budget bill

Gov't to 'swiftly' implement $17.5 billion financing scheme for export firms

The government will work to "swiftly" implement 25 trillion won ($17.5 billion) of policy financing for export companies following the planned passage of an extra budget bill by the National Assembly, the finance ministry said Thursday. In a pan-government meeting on trade issues, the Ministry of Economy and Finance asked related agencies to thoroughly prepare for the execution of the extra budget bill, expected to be endorsed by the Assembly later in the day. Earlier in the day, the rival parties agreed to pass a 13.8 trillion-won extra budget aimed at revitalizing the economy and helping disaster response. With the envisioned budget, the government plans to provide some 25 trillion won worth of liquidity support to local companies hit by U.S. tariffs. Under the plan, the state-run Export-Import Bank of Korea will offer 10 trillion won in trade financing to local exporters, and the Korea Trade Insurance Corp. will provide 2.4 trillion won worth of special trade insurance to small and medium-sized enterprises (SMEs), according to the ministry. The ministry said the government will continu