The government will lower the maximum corporate tax rate from 25 to 22 percent in a bid to encourage businesses to expand investment and hiring.

Announcing the Yoon Suk Yeol administration's economic policy direction on Thursday, officials said they will adjust taxation and ease regulatory measures to boost freedom and creativity in the private sector and the market.

The government will revise the tax system for domestic and overseas retained earnings and dividends to prevent businesses from double taxation.

As part of efforts to spur family business succession, including the generational transfer of technology and capital, the government will establish a system to defer taxes and expand eligibility to businesses with sales of up to one trillion won.

The government will expand incentives for investments in strategic national technologies, including semiconductors, by unifying the tax deduction rate to eight to 12 percent, whether they are conglomerates or small- to mid-sized enterprises.