South Korea's Future Response Fund could near 100 trillion won in year one

South Korea is set to announce as early as the 20th or 21st a Future Response Fund designed to sweep up tax windfalls from booms such as semiconductors and redirect them to medium- and long-term investment in future industries and support for youth, regional and education sectors. Based on a proposed benchmark tied to the 10- or 20-year average annual growth rate of internal tax revenue, now under discussion at 6.1%, observers estimate the fund could receive more than 60 trillion won next year and as much as 85 trillion won if internal taxes rise to 95% of national tax revenue; adding savings from an education-grant overhaul could take the total to nearly 100 trillion won ($72 billion). Officials are also weighing ending the rule that sends 20.79% of internal taxes to local education grants and replacing it with a formula based on three-year nominal growth and school-age population changes, a shift that would put next year's grants at about 80.3 trillion won versus roughly 100 trillion won under the current system, while the two ministries continue to negotiate a minimum guaranteed level.

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South Korea's Future Response Fund could near 100 trillion won in year one - CoinPost Terminal