South Korea Plans to Reinvest Semiconductor Tax Surplus for Growth

Lee, Emphasis on 'Reinvestment' Using Semiconductor Excess Tax Revenue... Which Basket Will the Funds Go Into?

Newsis Input 2026.06.09 07:52 Modified 2026.06.09 07:52

[Seoul=Newsis] Reporter Ahn Ho-gyun = President Lee Jae-myung has revealed his plan to use the excess tax revenue generated by the semiconductor boom for investment in expanding growth potential. If tax revenues exceed expectations in strategic industries such as artificial intelligence (AI) and semiconductors, the creation of an institutional framework to utilize them is expected to accelerate.

According to relevant ministries on the 9th, President Lee said at the press conference the previous day marking his first anniversary in office, "I will soon unveil a large-scale investment project that will achieve a 'great transformation of growth strategy' before the people. I will carefully ensure that the National Growth Fund, which receives enthusiastic support, plays its role of 'growth for all,' and I will also prepare ways to most effectively utilize the excess tax revenue from semiconductors."

The usage plan for the excess tax revenue is focused on 'reinvestment.'

The President said, "Currently, the potential growth rate is falling by 1 percentage point every five years. Raising the potential growth rate is a really important task. I believe that the excess tax revenue should be invested primarily in a direction that increases the growth potential of the Republic of Korea for future generations."

He also explained, "It is about discovering and investing in semiconductors and new growth engines. The younger generation is having a very difficult time, but if we invest for the future, we can give hope to the next generation."

Excess tax revenue refers to income that exceeds the revenue budget compiled based on the government's tax revenue estimates. Due to the semiconductor boom, this year's excess tax revenue is expected to be at least 25 trillion won.

The current National Finance Act places restrictions on the use of 'surplus funds' arising from excess tax revenue. Surplus funds can be used as expenditure budget only after prioritizing the settlement of local grants, local education grants, public fund repayment, and national bond repayment.

Since the President has indicated that it is desirable to use the excess tax revenue for reinvestment for the future rather than using it like a general budget or for repaying national bonds, the work to create an institutional framework is expected to accelerate.

The 'Korean-style sovereign wealth fund,' which the Ministry of Economy and Finance plans to establish in the first half of the year, is being considered as a basket for the excess tax revenue. The Ministry plans to accumulate national wealth and pass it on to future generations by investing government-held assets in stocks, bonds, alternative assets, etc., similar to Singapore's Temasek. The sovereign wealth fund is expected to be used for investments in innovating local manufacturing capabilities, building an AI-based manufacturing ecosystem, and securing stable manufacturing sovereignty.

Initially, the government planned to create a sovereign wealth fund worth 20 trillion won using government-held stakes in public enterprises such as the Industrial Bank of Korea and the Export-Import Bank of Korea, as well as inherited stocks paid in kind. However, as arguments to put excess tax revenue into the sovereign wealth fund gain traction, the size may increase.

Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-cheol recently said in an interview with the YouTube channel 'Sampyo TV,' "We intend to create a virtuous cycle structure where excess tax revenue generated when the economy is good is kept as a resource for the sovereign wealth fund and then invested to make money again."

Meanwhile, the Ministry of Strategy and Budget is pushing to establish a tentatively named 'Future Response Fund' financed by excess tax revenue. Since excess tax revenue is likely to occur temporarily, the idea is to prepare for future fiscal demand by accumulating it in a separate fund rather than using it all immediately.

Additionally, there is discussion of putting excess tax revenue into the National Growth Fund in the spirit of sharing investment performance with the people. This is because, in the National Growth Fund, not only public and private capital but also ordinary citizens participate as investors and receive investment returns.

However, the President drew a line, saying that the opinion that 'excess profits' exceeding expectations of individual companies should be utilized for society should be 'cautious.'

The President said, "The operating profit margin of (semiconductor conglomerates) is exceeding 75%. In the past, this was unimaginable. I have pondered a lot whether this is solely the company's own or how to handle it. The new society that will come in the future will have a lot of these debates."

However, he noted, "The problem is that if only our country does this, companies may all flee. Prominent high-tech companies abroad will be reluctant to invest in Korea, and domestic companies will be the same. We can discuss it, but if handled incorrectly, we could step on the sprouts while they are growing. Since it greatly affects not only domestic discussions but also international trade order, I think international-level discussions are necessary."

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