A protester holds a placard to condemn South Korean President Yoon Suk Yeol's surprise declaration of martial law. Reuters
A protester holds a placard to condemn South Korean President Yoon Suk Yeol's surprise declaration of martial law. Reuters
A protester holds a placard to condemn South Korean President Yoon Suk Yeol's surprise declaration of martial law. Reuters
A protester holds a placard to condemn South Korean President Yoon Suk Yeol's surprise declaration of martial law. Reuters


Few believed martial law was the way for South Korea - that's why it failed


  • English
  • Arabic

December 04, 2024

South Korea's declaration of martial law on Tuesday night, and then abrupt reversal a few hours later, came as a shock to the vast majority of the country's population. Martial Law Commander Army General Park Ann-soo had been forthright. The move came, he said in a statement, "to protect liberal democracy and ensure public safety in the Republic of Korea against the threat posed by anti-state forces conspiring to overthrow the nation's system".

The country’s Parliament disagreed, with lawmakers voting unanimously to lift martial law in the early hours of Wednesday.

Outside observers may have been surprised by the upheaval; to them, the country may seem to have been a relatively stable democracy since 1988 and the establishment of the Sixth Republic. But its politics have been extraordinarily fractious and, some might claim, vindictive. Since then, five ex-presidents have been subject to criminal investigations; four were sentenced to jail and one died by suicide. The current leadership faces an opposition-controlled National Assembly, which, it says, has "paralysed the administration", impeaching members of its cabinet and blocking legislation. President Yoon Suk-yeol now faces calls to resign, and possible impeachment himself.

Regional leaders will be careful in their responses. South Korea is an important trading partner, and while many do not wish to take sides in any US-China rivalry they do not, in private, object to the country's alliance with America. They may not say so publicly, but if managed carefully, they see that alliance as being able to contribute to balance in the Asia-Pacific. And beyond expressions of "concern", they will not wish to involve themselves in the internal politics of a nearby friend. The principle of "non-interference" is a key pillar of regional organisations such as the Association of South-East Asian Nations (Asean).

  • South Korean President Yoon Suk Yeol delivers a speech to declare martial law in Seoul, South Korea, on Tuesday. Reuters
    South Korean President Yoon Suk Yeol delivers a speech to declare martial law in Seoul, South Korea, on Tuesday. Reuters
  • South Korean soldiers try to get into the National Assembly on December 4 in Seoul. Getty Images
    South Korean soldiers try to get into the National Assembly on December 4 in Seoul. Getty Images
  • South Korean troops enter the parliament building in Seoul during President Yoon Suk Yeol's short-lived attempt to impose martial law. AFP
    South Korean troops enter the parliament building in Seoul during President Yoon Suk Yeol's short-lived attempt to impose martial law. AFP
  • Soldiers try to enter the main hall of the National Assembly. AFP
    Soldiers try to enter the main hall of the National Assembly. AFP
  • Barricades at the National Assembly. Getty Images
    Barricades at the National Assembly. Getty Images
  • Members of South Korea's main opposition Democratic Party set up barricades at an entrance to the National Assembly building. AFP
    Members of South Korea's main opposition Democratic Party set up barricades at an entrance to the National Assembly building. AFP
  • Protesters clash with police officers. EPA
    Protesters clash with police officers. EPA
  • People surround a military vehicle. EPA
    People surround a military vehicle. EPA
  • South Korea's National Assembly speaker Woo Won-shik passes a resolution demanding the immediate lifting of martial law at the National Assembly. AFP
    South Korea's National Assembly speaker Woo Won-shik passes a resolution demanding the immediate lifting of martial law at the National Assembly. AFP
  • South Korea's main opposition Democratic Party leader Lee Jae-myung speaks to the media at the National Assembly. AFP
    South Korea's main opposition Democratic Party leader Lee Jae-myung speaks to the media at the National Assembly. AFP
  • Lawmakers and members of the South Korea's main opposition Democratic Party demonstrate against the country's president at the National Assembly. Getty images
    Lawmakers and members of the South Korea's main opposition Democratic Party demonstrate against the country's president at the National Assembly. Getty images
  • Lee Jae-Myung, centre, leader of the opposition Democratic Party, stands in front of the National Assembly. EPA
    Lee Jae-Myung, centre, leader of the opposition Democratic Party, stands in front of the National Assembly. EPA
  • Police vehicle sprays tear gas at tens of thousands of student demonstrators in downtown Seoul. AP
    Police vehicle sprays tear gas at tens of thousands of student demonstrators in downtown Seoul. AP
Politics have been extraordinarily fractious and, some might claim, vindictive

More widely, however, and especially in foreign policy and security circles, the sentiment will go beyond "concern" about the – albeit brief – establishment of martial law. For the region has extensive experience of variants of this policy, and it has rarely proved to be beneficial in the long run. When Gen Ne Win seized power in Myanmar in 1962, for instance, it may well have been the case that the country was in danger of disintegration. But the "Burmese Way to Socialism" that he pursued until he stepped down in 1988 reduced a state once known as the "rice basket of South-East Asia" to what the UN called a "least developed country". The February 2021 military coup, after a decade of hybrid democracy, has led to a prolonged civil war, a humanitarian crisis and more than three million people displaced.

Similarly, when then president Sukarno declared martial law in Indonesia in 1957, it was partly in reaction to the grave instability in the country at the time. But it also served to further empower the armed forces that effectively forced him from power in 1966 and then ran the country under the New Order regime until 1998. In the Philippines, when then president Ferdinand Marcos instituted martial law in 1972, it was the turning point after which a formerly popular politician moved to what he called an ideology of "constitutional authoritarianism". Others would use stronger words to describe his subsequent rule.

In Cambodia, then prime minister Lon Nol introduced martial law in 1970, but was so brutal in suppressing a rebellion that had broken out, that he “inadvertently” drove “many peasants into supporting the Communist Party of Kampuchea, also known as the Khmer Rouge”, as a US Department of Defence study put it. The Khmer Rouge would later drive him from power in 1975 and led a genocidal regime that led to the deaths of nearly 25 per cent of the population, until Vietnam invaded and toppled the administration in 1979.

Thailand has a history of military coups d’etat, with the most recent imposition of martial law being from 2014 to 2015. Again, the reason given may have been "to preserve law and order", but most analysts believe that military rule can only ever freeze the country’s deep political divisions, not resolve them.

South Korea has its own experiences of martial law as well, but it had not, until Tuesday, been declared for 44 years. The country has in fact been held up as a model of the democratic system, even hosting the third Summit for Democracy in May this year. Not everyone would put it on quite such a pedestal, but a Chatham House report in 2022 nevertheless concluded that “the challenges of contemporary South Korean politics are neither intractable nor a sign of irreconcilable differences”.

However, whatever troubles the country and its current leadership may be facing, and whatever uncharted waters may lie ahead, there appear to be few, either in South Korea or the wider region, who believe that martial law is a realistic solution. South-East and East Asia have undergone lengthy periods of such rule. Most believe it belongs, and deserves to belong, in the history books.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Tax authority targets shisha levy evasion

The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.

Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".

The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.

He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.

"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.

As with cigarettes, shisha was hit with a 100 per cent tax in October 2017, though manufacturers and cafes absorbed some of the costs to prevent prices doubling.

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