Content company CJ Studio Dragon invested 26 billion won in the drama ‘Vincenzo’, which aired last year. The amount of tax deducted from this investment was 750 million won. If CJ produced the same play in California, how much would it take? It is more than four times more than 3.35 billion won. As such, the government has decided to review the system to increase the tax credit rate amid loud voices that support for the content industry is insufficient compared to the United States and the European Union ( EU).
In an interview with Korea Economic Daily on the 22nd, 2nd Vice Minister of Science, Technology, Information and Communications Park Yun-gyu said, “The cost of producing dramas has risen significantly due to aggressive investment in global online video service ( OTT) , but domestic companies complain of difficulties due to lack of investment.” We will continue to consult with relevant ministries to expand the tax credit,” he said. This is the first time that a high-ranking government official has mentioned an increase in the tax credit rate for OTT investments.
The Ministry of Science and ICT is pushing for a plan to raise the current tax credit rates from 3% for large enterprises, 7% for medium enterprises, and 10% for small and medium enterprises to 5%, 10%, and 15%, respectively. It is known that politicians also agree on the need to increase the deduction rate regardless of the opposition parties. Vice Minister Park emphasized, “It will help ensure the competitiveness of domestic OTT, which is fiercely competing with global companies.
The Ministry of Science and ICT will soon announce the ‘National Digital Comprehensive Policy’ including such OTT support measures.
Based on the ‘Digital Vision’ unveiled by President Yoon Seok-yeol in New York on the same day, the policy includes △ Strengthening incentives for companies to invest in talents △ Cultivating the SaaS industry △ Ensuring core technology for Metaverse △ Ease regulations on supply and radio wave of new industries etc will be included. Vice Minister Park said, “We will support Korean companies to become globally competitive and lead the global digital order.”
Park Yoon-gyu, 2nd Vice Minister of Science and ICT “I will lower the threshold of the regulatory sandbox and let companies run”
Government “Expansion of OTT tax credit”
Park Yun-gyu, 2nd Vice Minister of Science, Technology, Information and Communications (pictured) is one of the busiest public officials in Yun Seok-yeol’s government. Between the end of June and the 22nd of this month, a total of ten ‘digital government task area meetings’ were held, including nurturing artificial intelligence (AI) and big data companies and nurturing software talent. It is a forced march that visits industrial sites once every ten days.
Deputy Minister Park, who met at the Sejong Ministry of Science and ICT building on the same day, cited ‘communication with companies’ as the reason for holding a meeting despite a tight schedule. He said, “The purpose is to listen to the opinions of those who work in the industrial field, and seek the wisdom of solving contemporary issues together,” he said.
The results of the on-site meeting come out as policies. The Ministry of Science and ICT is amending the Decree and Enforcement Notice in response to Samsung Electronics’ request for a change in the radio wave inspection method for semiconductor facilities and Hyundai Motor’s request for frequency distribution for electric vehicle charging in wireless. Gangwon-do has opened forest fire surveillance video data at the request of AI startup Alchera.
Proposals from companies at the meeting are expected to be an opportunity to change the promotion policy of the digital industry. The Ministry of Science and ICT will soon publish the ‘National Digital Comprehensive Policy’ which includes the digital centenary, which is expected to include support for the globalization of online video service (OTT) companies and measures to strengthen cooperation between semi -domestic AI conductors and data centers. . Deputy Minister Park emphasized, “We set the policy direction together with the private sector from the initial stage of strategy formulation.
The Park Vice Minister is also very interested in improving the information and communication technology (ICT) regulatory sandbox system, which is in its fourth year. A total of 156 special cases were granted, 2,576 new employees were hired, and investment attraction of KRW 170.5 billion was achieved.
The system that Vice Minister Park envisioned is an ’empirical special case of conflict resolution’. For regulations with sharply divided opinions, such as medicine, pharmaceuticals, and biotechnology, stakeholders, experts, and the government together formulate a demonstration method and implement the demonstration in less than a year ‘. He emphasized, “There is a part that recognizes the process of applying for the sandbox and moving on to it as a regulation, so we are trying to simplify it.
He also talked about current issues in the industry. Regarding the reform of the ‘Cloud Service Security Certification (CSAP)’ system that allows foreign cloud companies to enter the public market, Vice Minister Park said, “We intend to prepare details after full consideration the impact on the overall industry.” This is interpreted to mean that the concerns of domestic companies will be reflected.
He also expressed his intention to nurture the cloud and software-as-a-service (SaaS) industries. Vice Minister Park emphasized, “Next year, we will invest 37 billion won to expand SaaS available in major industries and public sectors and support domestic SaaS companies to advance to the global market.” Regarding the use of the 5G (5th generation) 28GHz frequency, he said, “We are operating a working group that includes three telecommunications companies and Samsung Electronics, and a little more effort is needed.”
He said, “We will discuss so that the wishes of the telecommunications companies can be reflected,” he said.
Reporter Hwang Jung-soo/Lee Seung-woo firstname.lastname@example.org