Korea (Rep.) plans to establish a Future Response Fund to channel excess tax revenue towards younger people and investment in artificial intelligence and other growth industries.
Korea (Rep.) plans to establish a future response fund to use additional tax revenue from strong economic periods to support younger people and invest in future growth industries, the budget ministry said on Friday, 21 August 2026.
The fund would support youth employment, housing, asset building, marriage and childbirth, as well as investment in artificial intelligence (AI), regional development and talent development.
The fund would be financed mainly by tax revenue collected above a benchmark based on the average growth in domestic tax receipts over the previous 10 years. Excess revenue accumulated during stronger years could later be used to help cushion periods of weaker tax revenue. The government has not provided an official estimate of the fund’s size, although local media reported that it could exceed KRW 100 trillion (USD 72.28 billion).
The plan comes as Korea (Rep.)’s semiconductor industry benefits from rising demand linked to the AI boom. Samsung Electronics and SK Hynix have seen their earnings increase as demand for semiconductors grows. Investment under the fund would focus on AI and other strategic technologies, alongside regional development and talent development.
The proposal also addresses challenges facing younger people. Government data showed that the youth unemployment rate rose to 6.8% in July. President Lee Jae Myung has pledged to expand opportunities for young people amid low birth rates, housing affordability concerns and labour market challenges, while warning that the spread of AI could further affect employment prospects.
The Future Response Fund is also linked to an overhaul of education funding, with more resources planned for talent development, higher education and lifelong learning. The government plans to submit related legislation to the National Assembly alongside its 2027 budget proposal next month.
