(Maekyung DB)

尹Government, differential support for ‘damage support’ for small businesses… Review up to 6 million won

(Maekyung DB)

Instead of the existing quarantine subsidies, the new government decided to pay subsidies in proportion to the amount of losses that companies received under the name of ‘Small Business Damage Subsidy’. Unlike the initial lump sum payment of 6 million won to small business owners, the key is to provide differential payments according to the degree of damage.

This loss compensation is supported in the form of a mixture of cash, finance and tax. In case of cash payment, there are damage subsidy and loss compensation system. In the case of cash payment, there were differences according to the level of quarantine measures (ban on gatherings and restrictions on business) in the past, but this time, the payment is divided according to the size of the loss. The upper limit is expected to be set at around 600,000 won. The loss compensation system is a cash compensation system for losses suffered in the first and second quarters. The takeover committee is considering raising the existing loss compensation rate of 90% to 100% and the lower limit of 500,000 won to 1 million won, respectively. In addition, indirect damage industries such as the travel industry, exhibition conventions, and performance industry will be included in the loss compensation target.

In this support plan, a new financial structure package for small businesses was established. Financial support includes contents such as adjustment of bad debts for small businesses and alleviating the burden of non-bank loans. Small business owners will reduce the interest rate burden by converting loans received at high interest rates from the second financial sector, such as card, capital, and savings banks, into loans from the first financial sector, and the government will promote the exchange of banknotes and interest preservation to the banks that compensate for the difference in interest rates. In October, the company plans to promote special fund support tailored to small business owners.

In order to reduce the tax burden on small businesses, the payment deadline for various taxes and tax credits will be expanded. Income and VAT are extended by 2-3 months, and local income tax is extended by 3 months. The limit of the preferential deduction for the fictitious input tax credit for duty-free agricultural products will be raised by 5 percentage points. The purpose is to reduce the burden on business owners by increasing the input tax deduction provided when business owners supply goods or services manufactured and created with raw materials such as agricultural products, livestock products, and fishery products purchased with value-added tax exemption. In the case of the prepayment tax credit, the deduction rate will be increased compared to the previous one. This is to expand income tax deductions for small business owners who meet certain requirements and make advance payments, which can help sales. In addition, the ‘good lessor tax credit’, which provides tax credit benefits to lessors who voluntarily reduce rents for small business owners in need, plans to extend until 2023.

Simultaneously with the inauguration of the new government on May 10, the second supplementary budget bill to compensate for the loss of small businesses and small businesses will be submitted to the National Assembly. The specific amount of support will also be announced at this time. The transition committee announced that it would pay from June on the premise that the second supplementary budget bill would be passed by the National Assembly. However, the retroactive application of the loss compensation system is not applicable.

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