SEOUL, Feb. 26 (Korea Bizwire) — The government said Saturday that it will extend exemptions on various charges for manufacturing startups, translating into sizable benefits going forward.
The Ministry of SMEs and Startups said the recent passage of the small and medium enterprise (SME) support plan through parliament will permit newly founded companies to be excluded from 12 different types of allotments, such as the farmland preservation charge and the electric power industry basis fund, for five years.
The charges are viewed as quasi-taxes levied by the government on industries to generate money to build up certain sectors and infrastructure, but the business community claims they add extra burdens on companies that are just trying to get started.
Seoul, as part of its SME assistance program, exempted smaller companies from charges for the first three years after they start operations, but that guideline expired in August 2017.
Data showed that from its introduction in 2007 to 2016, 24,441 companies have taken advantage of the exemption clause, with benefits estimated at 140.8 billion won (US$130.5 million).
“With the extension of the exemption rules, an average of 2,400 newly set up manufacturing companies will save some 14 billion won in charges annually,” a SME ministry official said.