Lim Kwang-hyun, commissioner of the National Tax Service, was named on the 14th as chief of staff to the president for the second phase of the Lee Jae-myung administration, renewing attention to the tax philosophy he has advocated since his days as a lawmaker, when he pushed to expand inheritance tax deductions. While the presidential policy office serves as the control tower for economic policy, the chief of staff also occupies a post close to the president, able to offer political advice on the full range of state affairs. Because he has long argued as a tax expert that the inheritance tax burden on middle-income households passing down a single home should be eased while tax benefits concentrated on ultra-expensive homes should be reduced, observers say he could influence tax reform closely tied to household finances.
The area Lim has consistently emphasized, both in politics and at the tax authority, is the expansion of inheritance tax deductions. In 2024, as a Democratic Party lawmaker, he sponsored a bill to raise the lump-sum inheritance deduction from 500 million won to 800 million won and the minimum spousal deduction from 500 million won to 1 billion won. Combining the lump-sum and minimum spousal deductions, the measure would have expanded total deductions to 1.8 billion won. The aim was to reflect the reality that the inheritance tax, once seen as a levy on the wealthy, had come to affect middle-income households as home prices and consumer prices rose.
That conviction did not change after he became tax commissioner. At a parliamentary audit of the National Tax Service on the 13th of this month, Lim responded to a question from Democratic Party lawmaker Lee Kwang-jae — who asked whether the spousal inheritance deduction and the lump-sum deduction, unchanged for nearly 30 years, needed to be brought in line with reality — by saying, "I fully agree with the point you are making."
Lim is known to have told those around him that expanding inheritance deductions is not a tax cut for the rich but a policy to ease the burden on middle-income households. Holders of very large fortunes, he has argued, are more interested in lowering the top tax rate or in the family business succession deduction than in expanding basic deductions, while an expansion of deductions offers real help to middle-income households facing heavier inheritance taxes because of rising home prices. He is said to have expressed regret in particular that pursuing the current property tax overhaul alongside an expansion of inheritance deductions could have softened the backlash against tighter property taxation.
By contrast, he has taken a favorable view of reducing tax benefits for ultra-expensive homes. He has described the 1 billion won cap on the special long-term holding deduction for capital gains tax as the measure likely to have the greatest impact on the market. The tax reform plan the government announced in August of this year included reworking the special long-term holding deduction around actual residence and capping the deduction at 2 billion won in 2028 and 1 billion won from 2029. Tighter residency requirements can be met by actually living in the home, the reasoning goes, but setting a ceiling on the deduction amount could directly affect decisions by owners of ultra-expensive homes in areas such as Seoul's Gangnam district on whether to sell.
He also holds the view, however, that tax and financial regulation alone have limits in resolving the problem of home prices, and that the fundamental solution lies in expanding housing supply. On taxation of family business succession, he is known to have viewed favorably a plan to reduce capital gains tax when an owner sells a company to a third party rather than passing it to a child, while voicing strong concerns about the possibility of using the family business succession deduction — through large bakery cafes, for example — to pass down real estate through loopholes.
After his nomination as chief of staff that day, Lim pledged: "My calling is to carry forward the achievements of the Lee Jae-myung administration and to deliver changes in people's lives that they can feel firsthand. The public's days are urgent, so the Blue House's days must be urgent too. I will devote all my strength to changing the hard days people are living through."
The main policies he pursued as tax commissioner are also seen as closely connected to everyday life. He had the agency identify about 5,700 jointly titled single-home-owning couples for whom applying for a comprehensive real estate tax exemption would be advantageous, and about 2,900 for whom canceling it would be better, and notify them of their expected tax bills in advance. He also actively pushed a plan to cut the withholding tax rate on income from personal services, such as delivery riders, from 3.3% to 2.2%. As a lawmaker, he raised the need to introduce indexation that would adjust income tax brackets in line with inflation.
