The biopharmaceutical industry expressed its intention to welcome the National Assembly’s move to include “bio-health” in the national strategic industry eligible for tax benefits.
In a statement on Thursday, KoreaBIO said it warmly welcomed the revision bill proposed by 11 lawmakers, including Rep. Chung Il-young. The amendment bill calls for adding the bio-health sector to semiconductors, secondary batteries, vaccine, and displays as national strategic technology as stipulated by the Tax Reduction and Exemption Control Act.
“Last September, U.S. President Joe Biden signed an executive order to promote the growth of various industries ranging from health, agriculture, and energy through biotechnology and biomanufacturing innovation, providing extensive support on the government level,” the association said. “Earlier, China also established a five-year bio-economy plan to provide systematic support for the bio-industry.”
According to KoreaBIO, the areas that receive extensive support from the U.S. and Chinese governments, such as bio-compounds, medicines, medical devices, healthcare, and biochemistry, are included in the source technology for new growth in the current Tax Reduction and Exemption Control Act.
The new amendment bill proposed by Rep. Chung calls for upgrading these technologies from new growth technology to national strategic technology, which benefits from up to 8 percent credit.
In addition, the association said the targets of tax credits should be expanded to research institutes and other infrastructure.
“In the bio-industry, buildings are designed as sterile facilities and are used as research infrastructure, but the government considers them as ordinary buildings, exempting them from tax credits,” it said. “It is necessary to expand the scope of deductions limited to manufacturing facilities.”
The group noted that the bio-industry's importance in health, security, and the economy had been further highlighted through Covid-19.
“The competitions between countries and businesses are intensifying,” it said. “Industrial countries, such as the U.S. and China, are considering various investment incentives to strengthen their bio-industrial production capacities.”
Pointing out that extensive investment is needed to develop and manufacture bioproducts, and it takes a long period to retrieve investment money, KoreaBIO added, “We warmly welcome the amendment bill proposed by Rep. Chung and hope it will win the National Assembly’s approval as soon as possible to strengthen the nation’s industrial ecosystem.”