The sunset clause for tax breaks is a sunset clause in name only, with 87% retained over the past decade [A sunset clause without sunset]

As the government has announced a policy to restructure tax expenditures while cutting back on routine tax breaks, most Special Taxation Benefits that reached their sunset dates over the past decade have been kept in place through repeated extensions. Critics say measures that were introduced as temporary have effectively become permanent, making significant resistance in any future restructuring effort inevitable.
According to 'Special Taxation Benefits Status Data' obtained by Financial News from the office of Kim Sang-hoon of the PPP on the 17th, the average retention rate for Special Taxation Benefits that reached their sunset dates over the past 10 years stood at 87%. In effect, 8 to 9 out of every 10 measures were extended or maintained.
Special Taxation Benefits are a system that reduces taxes to support specific industries or achieve policy goals. Many of these measures are introduced with sunset clauses that end their effect after a set period, and when the deadline arrives, lawmakers decide again whether to extend, redesign, or abolish them. The idea is to reassess policy effectiveness and support needs before deciding whether to keep them. In practice, however, many remain unchanged even after their sunset dates, weakening the original purpose of being temporary.
In 2025, a total of 72 Special Taxation Benefits reached their sunset dates, but only 7 were abolished. The remaining 65 were kept through extensions or redesigns, pushing the retention rate to about 90.3%. In 2024, only 6 of 71 were abolished, leaving a retention rate of 91.5%. In 2023, 11 of 74 were abolished, meaning about 85% were retained. More than 90% were also maintained in 2022.
In particular, some Special Taxation Benefits are being kept in place simply by extending their application periods, without any redesign to reflect changes in the policy environment. As of 2024, about half of the retained measures were extended without any separate institutional reform.
Analysts say the reason sunset clauses keep being extended is that once a tax break is introduced, vested interests form around it, and demands for extension become stronger than calls for abolition. Heavy resistance to reducing tax breaks, along with lawmakers' reluctance to approve abolition, is also cited as a factor that makes restructuring difficult.
As a result, many Special Taxation Benefits have lasted for decades. The income tax deduction for credit card usage and similar spending, introduced in 1999, has been repeatedly extended and remains in effect today. The National Assembly Budget Office (NABO) recommended a medium- to long-term reduction or abolition, saying its policy effect has weakened as electronic payments have become widespread. The government, however, extended the application period again until the end of 2028.
Professor Kim Woo-cheol of the Department of Taxation at the University of Seoul said, "If something is maintained for too long, it stops being an exception and becomes the standard." He added, "Once it becomes embedded as part of the tax system, it becomes extremely difficult to reform."
hippo@fnnews.com Kim Chan-mi, Choi Yong-jun Reporter