Controversy Over 100 Million Won Childbirth Incentive Fund Sparks Tax Debate

Controversy Surrounds Childbirth Incentive Fund of 100 Million Won due to Tax Issues

The announcement by Buyoung Group to provide a childbirth incentive fund of 100 million won to its employees has sparked a heated debate over tax issues. The potential tax implications have raised concerns about the effectiveness of the support.

Taxation of the Childbirth Incentive Fund

If the childbirth incentive fund of 100 million won is treated as income, employees receiving it may have to pay up to 38% in taxes when combined with their existing income. For instance, a employee earning an annual salary of 70 million won would have to pay 38 million won in taxes if they receive 100 million won.

Seeking Solutions

Buyoung Group is calling for measures to address the tax issue. They have also expressed willingness to provide the childbirth incentive fund as donations to the children’s accounts, aiming to alleviate the tax burden. However, this approach may pose difficulties in expense management and increase the company’s financial burden.

President Urges Response to Tax Issues Surrounding Childbirth Incentive Fund

As the controversy surrounding the tax implications of the childbirth incentive fund grows, President Yoon Seok-yeol has addressed the issue and called for a response. The President has urged the exploration of various support measures, including tax benefits, to encourage voluntary support for childbirth by businesses.

Review by the Ministry of Strategy and Finance

In response to the President’s directive, the Ministry of Strategy and Finance is currently reviewing the tax issues surrounding the childbirth incentive fund. One potential solution under consideration is to increase the tax-exempt limit for childbirth and childcare allowances, which currently stands at 200,000 won per month and 2.4 million won per year. Additionally, the possibility of providing tax deductions based on the size of the company is being discussed.

Concerns for Small Businesses

Other companies implementing childbirth incentive policies are also paying attention to this issue, with some calling for measures to address the needs of small-scale enterprises that may struggle to provide such benefits. Resolving the tax issues related to the childbirth incentive fund is crucial for the smooth implementation of childbirth support policies. The Ministry of Strategy and Finance’s review, prompted by the President’s directive, is underway, and measures for small businesses are also being considered.

Resolving Tax Issues Crucial for the Success of Childbirth Incentive Policies

Addressing the tax issues surrounding the childbirth incentive fund is vital to ensure the successful implementation of childbirth support policies. The government’s response and the activation of voluntary childbirth support by businesses are necessary to increase the birth rate.

Source: Jtbc