The government invests ₩16 trillion for COVID-19

to overcome COVID-19 outbreak

Deputy Prime Minister, Nam-gi Hong announced comprehensive measures

Submitted the supplementary budget of ₩ 6.2 trillion to the National Assembly

The government announced on the 28th that it would invest about ₩16 trillion to finance, tax and banking to solve the problems caused by the spread of COVID-19.

 

From March to June, the check and credit card income deduction rate will be doubled to the previous level, and individual consumption tax will be cut by 70%.

 

VAT payments for self-employed business owners who suffered the damage of COVID-19 with annual sales of less than ₩60 million will be reduced to the level of simplified taxation by the end of next year.

 

The government is also planning to submit additional revision budgets worth ₩6.2 trillion, the similar size of MERS crisis, with the aim of COVID-19 quarantine, diagnosis, treatment, recovery of damaged small business, public welfare and employment stability, and support of the stagnant regional economy.

 

The economic vitality council held by Nam-ki Hong, Deputy Prime Minister & Minister of Economy and Finance included the contents.

 

Nam-ki Hong, Deputy Prime Minister said, “As the spread of infections in the community worsened, the difficulties for the public's lives and the economy became severe and included special measures worth up to ₩16 trillion.

 

It is to support strong overcoming damage and to reinforce consumption, investment and export slowdown”.

 

The government will invest about ₩7 trillion in finance (₩2.8 trillion), tax (₩1.7 trillion), banking (₩2.5 trillion), and ₩9 trillion.

 

in public and financial institutions.

 

If the government adds ₩4 trillion of measures already in place, the government will spend ₩20 trillion.

 

In addition, if the supplementary budget of more than ₩620 trillion is included, over ₩26 trillion will be spent to overcome COVID-19 outbreak.

 

In February, the government revised the tax law in the extraordinary parliament and the income deduction rate of workers' credit card use will be from 15% to 30%, the use of ATM cards and cash receipts from 30% to 60%, and the use of traditional markets and public transportation will raise by 40 → 80% temporarily.

 

In the same period, the individual consumption tax will be reduced by 70% from 5% to 1.5% within the limit of ₩1 million.

 

Compared to the 30% reduction from the second half of 2018 to the end of last year, the cut has more than doubled, and the government expects the tax benefits to reach ₩470 billion.

 

Benefits are doubled by adding 70% reduction in the individual consumption tax, which is applied to converting old cars to new cars for more than 10 years by the end of June.

 

It also reduces tax burdens for small business owners who have been damaged by COVID-19.

 

By the end of next year, VAT payments for small business owners with annual sales of less than ₩60 million will be reduced to the level of simplified taxation.

 

The plan is to keep the simple tax base of ₩48 million in annual sales and keep the VAT burden low.

 

As a result, the government expects that 900,000 individual business owners will receive tax incentives of ₩800 billion for two years, with annual averages of ₩200,000 ~ ₩800,000 per business per person The government subsidizes ₩500,000 in family care expenses until the end of COVID-19 outbreak when parents use family care leave to take care of children under 8 years of age, with the closing of nursery schools according to COVID-19.

 

The job coupon system, which provides 20% of the total remuneration to elderly job participants in the form of local gift certificates, is also temporarily implemented for four months.

 

The participant, however, must receive 30% of the total remuneration as a gift certificate, including any additional payment.

 

It also introduces vacation, culture, tourism and maternity coupons, and a system that refunds 10% of the purchase price of high efficiency home appliances will also be implemented.