South Korea Eases Tax Burden for Small Businesses: 140,000 to Benefit

South Korean Government Adjusts Simplified Tax System to Alleviate Tax Burden on Small Business Owners

The South Korean government has announced a significant overhaul of the simplified tax system to alleviate the tax burden on small business owners and self-employed individuals. Starting from July, the threshold for the simplified tax system will be adjusted from below 80 million won to below 140 million won, benefiting approximately 140,000 individuals.

Benefits for Small Business Owners

As a result of this adjustment, around 140,000 small business owners and self-employed individuals will receive benefits. They will be subject to a tax rate between 1.5% and 4.0%, which is lower than the general tax rate of 10%. This measure aims to provide tax reduction benefits and support the recovery of domestic small and medium-sized enterprises.

Chief Prosecutor Yoon Seok-yeol’s Support Policies

During a public forum on supporting small and medium-sized enterprises, Chief Prosecutor Yoon Seok-yeol announced various support policies, including the revision of the simplified tax system. He emphasized the government’s commitment to assisting small business owners and self-employed individuals through various policy measures.

Impact of the Revised Threshold

The revised threshold for the simplified tax system is the first adjustment in four years. It is expected to be around 90 million won, taking into account factors such as inflation and tax revenue. This adjustment will have a significant impact on businesses, such as restaurants with annual sales of 100 million won, which will experience a substantial reduction in value-added tax.

Additional Support Measures

Alongside the adjustment of the simplified tax system, the government has introduced additional support measures. Small business owners with annual sales below 30 million won will receive a subsidy of 200,000 won for electricity bills. Those who have paid interest to savings banks or mutual finance companies will also receive interest refunds of up to 1.5 million won.

Collaboration with the Financial Sector

Chief Prosecutor Yoon Seok-yeol emphasized the importance of collaboration with the financial sector to support approximately 228,000 small business owners and self-employed individuals. A total of 240 billion won will be allocated for interest refunds, with an average refund of approximately 1 million won per person.

Debt Adjustment Loans and Regulatory Improvements

Starting from the 26th of this month, small business owners with high-interest loans of 7% or more can apply for debt adjustment loans with a lower interest rate of 4.5% and a maximum repayment period of 10 years. The government is also pursuing regulatory improvements to protect the rights of small business owners, ensuring fair treatment and preventing unfair fines.

Government’s Commitment to Supporting Small Business Owners

The government’s decision to raise the threshold for the simplified tax system and introduce various support measures reflects its commitment to supporting small business owners and self-employed individuals. These initiatives aim to alleviate their financial burden, promote economic recovery, and create a more inclusive and resilient economy.

Source: Dong-A Ilbo