Gov't to review tax incentives for young workers at SMEs: finance minister

SEOUL, June 17 (Yonhap) -- South Korea will review measures to offer income tax cuts for young workers at small and medium-sized enterprises (SMEs) in line with efforts to revitalize regional economies, the finance minister said.

"We will review applying differentiated income tax reduction rates and benefit periods for workers at SMEs," Finance Minister Koo Yun-cheol told reporters during a press event held in the southwestern city of Gwangju on Tuesday.

"In order to achieve economic growth led by regional areas, we will review providing preferential treatment for such regions through tax policies," Koo added.

Currently, South Korea offers a 90 percent income tax reduction for young workers at SMEs for a period of five years. Koo's latest remarks indicate the country may offer additional benefits to those based outside the greater Seoul area.

"Our focus is on providing greater benefits to those based farther from Seoul, where living conditions are more challenging, and ensuring that such benefits are provided to workers rather than companies," Koo said.

Touching on the economy, Koo said the recent decline in global crude oil prices is a "good sign."

"In order for the situation to fully clear up, the Strait of Hormuz must be fully reopened, and the United States and Iran must sign (the deal). After that, we have to monitor the situation for a certain period of time," Koo said.

The finance minister said South Korea will closely monitor prices before deciding whether to lift the fuel tax cut program currently in place, adding that the decision will be announced on Thursday.

Regarding additional tax revenue generated by chipmakers amid the artificial intelligence (AI) boom, Koo said such revenue should be used to address economic disparities, with a focus on young workers, small business owners and the self-employed.

"We are open to various options and will review them if necessary," Koo added.

Finance Minister Koo Yun-cheol speaks during a meeting held in Haenam, 330 kilometers south of Seoul, on June 16, 2026, in this photo released by the Ministry of Finance and Economy. (PHOTO NOT FOR SALE) (Yonhap)