The South Korean government has promised to extend tax deductions on corporate investments in new plants and equipment for an additional year.
The extension will be in force until the end of 2009.
The ministry of strategy and finance outlined that it will exempt taxation on seven per cent of total investments made outside of Seoul, while granting a three per cent deduction on those made inside the capital.
The move comes as the government steps up efforts to stimulate domestic capital spending.
Last month, South Korea unveiled a W14 trillion ($11 billion) fiscal stimulus package.
