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Photo: KBS News
A plan is being reviewed to include direct support for rental purposes in the third disaster support fund for small business owners and the self-employed paid in January.
As the scale of the third spread of the new coronavirus infection (Corona 19) increases, the scope and scale of disaster subsidies will increase.
Some voices say that if the expansion trend is not detected in the near future, it is necessary to organize additional budgets from the beginning of the year to provide large-scale support.
According to the Democratic Party and government authorities on the 20th, the plan to partially reflect the direct rent subsidy to tenants when the Corona 19 small business damage subsidy is paid next month is reported to be under review within the government.
In addition, a key Democratic Party official said: “We know that the damage subsidies to small business owners will be implemented as soon as possible in January, but at this time, we will consider a plan to include some direct measures to support rent.”
Another ruling party official said: “We are reviewing both tax support to landlords that lowered rent and direct rent support to tenants. If a situation arises, such as social distancing step 3, we will organize an additional supplement early of the year to make it more serious. “We are discussing ways to provide direct rental assistance.”
This discussion is in line with President Moon Jae-in’s statements that it is necessary to go one step further, rather than stick with existing measures such as “good homeowners” tax credits.
The government also initiated an internal review to implement a rental support plan for small business owners.
A Ministry of Equipment official said: “As the damage from the third extension of Corona 19 has increased, the extent and extent of the damage has increased.” There are many.”
On the other hand, the question of how to legally and institutionally support the rent of small business owners in special circumstances such as the Corona 19 crisis is also being reviewed.
The rental support policy for small business owners is largely divided into indirect support for landlords and direct support for tenants.
One of the supports for landlords is a good landlord policy that gives you a tax credit for 50% of the cut if the landlord reduces his rent. However, in order to attract more active participation from owners, measures are being sought to significantly increase the scale of support.
Currently, the policy of directly providing fixed-cost funds, such as rent, to tenants who are unable to operate due to government trade ban / restriction guidelines is a key topic of discussion.
The government and ruling party are reportedly paying close attention to the case of Germany, which provides up to 90% of fixed expenses for companies that close due to government action, and the case of Canada, where the government compensates 50% if the rent is reduced by 75% or more.
However, there is a considerable view that in Korea, where the share of self-employed workers is higher than in advanced countries, such large-scale financing is practically impossible. In the end, there are many analyzes that there is a high possibility that it is a subsidy payment method for small business owners and adds more subsidies on behalf of direct rental support. In other words, it is a predictable scenario to increase the amount of support given up to 2 million won per person for the prohibited collective business by 500,000 to 1 million won if the tenant condition is met.
There is considerable opinion within the ruling party that if rent support is scaled up, an additional budget must be organized early next year to respond.
This measure takes into account the situation in which the scale of the damage has already exceeded the level of the 2nd spread in the 3rd spread process, and even the 3rd step of distancing is being reviewed without the Corona 19 spread ceasing. Whether the current distance level is maintained for a certain period of time or is upgraded to the third stage, it is considered to be beyond the level that can be mobilized as a reserve for the purposes of next year’s budget.
The government is also reported to be discussing ways to expand the target of supporting disadvantaged and low-income groups, such as special-type workers (special high school), beyond the originally planned small business, reflecting the growing scale of damage.
Considering this demand, it is observed that the scale of the third damage subsidy will exceed at least 4 trillion won. Previously, the plan was primarily for small business owners and the self-employed to make up for their business losses, but now support for fixed costs such as rent and support for the disadvantaged is being revised.
The small business support fund organized in next year’s budget is 3 trillion won. Here, there are many opinions that it is possible to mobilize up to 4 to 5 trillion won, as there are resources available such as 500 billion won from the new desired small business fund that has not been exhausted this year, reserves for other purposes and funds additional.
As demands for the scope of support and the level of support increase, there is a possibility that the completion period for the third financing plan will be postponed until next year.
It is said that there may be changes to the plans that will be announced within the first month and implemented in the middle of next month.
An official from the Ministry of Science and Technology said: “There are still many issues to consider for further consideration,” he said. “Since the current goal and scale of support are reviewed from various angles, the content has not been decided in a specific direction.”
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