A large promotional banner announcing major discount events for the “Korea Grand Festival,” South Korea’s version of Black Friday, is displayed at a major supermarket in Seoul on October 29. (Yonhap)
SEOUL, Jan. 16 (Korea Bizwire) — The government will roll out a range of tax incentives to support vulnerable groups and small merchants, and expand strategic technology industries to help create new growth engines, the finance ministry said Friday.
The measures are part of a follow-up amendment to enforcement decrees linked to the government’s tax reform, which was approved by the National Assembly late last year, according to the Ministry of Economy and Finance.
Under the plan, the government will first expand tax support for low- and middle-income earners to help stabilize their livelihoods.
Interest income earned by individuals below a certain income threshold, as well as by young small business owners who subscribe to youth savings accounts, will be exempt from taxation, the ministry said.
The government will also broaden the range of factory workers eligible for tax exemptions on night-duty and overtime allowances.
Additional measures include expanded tax support for small merchants, including assistance for business owners seeking to restart operations after closure.
To this end, the government plans to establish legal grounds to waive unpaid tax liabilities of up to 50 million won (US$34,000) that are deemed difficult to collect.
“The measures are aimed at stabilizing people’s livelihoods through an inclusive tax system,” said Park Hong-ki, a ministry official, adding they are part of the government’s long-term efforts to rationalize the tax system.
Support for future strategic industries will be significantly expanded as the government broadens the definition of “national strategic technologies” to foster key industries.
In the semiconductor sector, technologies related to the development of advanced materials and components for next-generation multi-chip modules will be newly designated.
In the future mobility and transport sector, environmentally friendly advanced ship technologies, including liquefied natural gas (LNG) cargo containment and propulsion systems, will also be added.
Companies investing in designated technologies will be eligible for tax credits of up to 50 percent on research and development (R&D) costs, the ministry said.
The ministry said the plan will affect a total of 21 enforcement decrees. It plans to submit the amendment for Cabinet review in mid-February and promulgate it before the end of next month.
(Yonhap)
