Trillions of support promised ahead of Lunar New Year

Economy

Published: 20 Jan. 2021, 17:33

Trillions of support promised ahead of Lunar New Year

Kim Yong-beom, first vice minister of economy and finance, center, announces government's measures to support households and companies ahead of the Lunar New Year holiday during a briefing held Wednesday at the government complex in Seoul. [YONHAP]

Households and companies are to receive 38.4 trillion won ($34.9 billion) worth of government support ahead of the Lunar New Year holiday next month.

According to a list of holiday support measures released by the Ministry of Economy and Finance, the government will offer 38.4-trillion-won funds through special lending programs for households and companies suffering from a temporary liquidity crunch ahead of the traditional holiday, which runs Feb. 11 through Feb. 13.

The support is up roughly 2.1 trillion won from the previous year.

Over 31 trillion won of loans will be offered by commercial banks, while the rest will be provided by state-run banks and the Bank of Korea.

In a bid to boost donations to low-income households, the government will temporarily raise the tax credit rate on donations for this year. Currently, a 30 percent tax credit is offered for donations exceeding 10 million won, and 15 percent for smaller donations. The exact change will be announced after revising the current tax law.

"Though the tax credit rate will be increased for a year, this came up while making up measures to boost economy ahead of the Lunar New Year," said Kim Yong-beom, first vice minister of economy and finance, during a briefing held Wednesday. "For individuals, 70 percent of their donations currently go to religious groups, but since increased tax credit is put in place to relieve the widening rich-poor gap caused by the pandemic, we will find ways to funnel more donations to social and welfare groups."

To keep households warm, additional 30,000 won worth coupons to purchase briquettes will be granted to the lowest-income 53,000 households. In total, each household will get coupons to purchase 502,000 won worth briquettes.

In an attempt to boost sales at traditional markets, the government is running an online shopping sale with some 100 markets partnering with three online commerce platforms, including Coupang Eats and Noljang. For three weeks from Jan. 25, free delivery will be offered and special discount promotions held.

Vice Minister Kim said such promotions and marketing could continue if they work well during the holidays to boost sales at traditional markets.

Due to expectations that the number of parcels delivered will skyrocket near the holiday season, the government designated Jan. 25 through Feb. 20 as a special period dedicated to protecting couriers.

Usually, delivery volumes increase by some 10 percent during the holiday season, according to the Finance Ministry.

The government will ask public institutions and chaebol to avoid sending holiday gifts during the designated period. At online commerce platforms, the government is planning a nationwide campaign with the slogan, "It's okay to be late," so people complain less despite some delay in deliveries during the busy season.

As the number of daily cases of Covid-19 is still in the hundreds, the government will keep testing centers open during the holiday season. As of Tuesday, 620 test centers are being operated.

Also, 74 hospitals nationwide designated to treat Covid-19 patients will maintain service during holidays.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]