Government to cut small business bills, extend tax credit scheme in 2024

Economy

Published: 03 Jan. 2024, 17:47

Government to cut small business bills, extend tax credit scheme in 2024

People Power Party chief policymaker Rep. Yu Eui-dong, third from left, speaks during a consultative meeting with senior government officials including Finance Minister Choi Sang-mok, third from right, on Wednesday at the National Assembly in western Seoul. [NEWS1]

The government and President Yoon Suk Yeol’s ruling People Power Party (PPP) agreed to cut electricity bills for small businesses by 200,000 won ($153) during the first quarter and extend the temporary investment tax credit scheme, which expired at the end of last year.

The decision was made Wednesday during a consultative meeting on the country's economic policy plans for 2024 at the National Assembly in western Seoul.

“We anticipate the first half of this year to be the critical period for the recovery of the household economy, with domestic consumption remaining comparatively weak and the impact of last year’s slump in the construction industry likely to fully surface,” Rep. Yu Eui-dong, the PPP's chief policymaker, told press after the meeting.

Some 1.26 million small business owners will receive a 200,000 won reduction to their electricity bills, which will cost the government 252 billion won in total.

The government and the ruling party also agreed to provide financial relief to interest payments for small business owners through a 2.3 trillion won support program.

Vendors at traditional marketplaces will also receive tax relief. Their deduction rate will double, to 80 percent from the previous 40 percent, throughout the first half of this year.

The temporary capital investment tax incentive scheme, which is designed to stimulate corporate capital expenditure through tax relief, will be extended for another year after expiring at the end of 2023.

“The party has called on the government to ramp up support to ensure the recent rebound in exports will speedily translate into capital expenditure increases,” said Yu.

“This year’s economic policy will be centered on stabilizing the commodity price and further bolstering policy efforts to spread the warmth of recovery throughout the economy, including domestic consumption,” said Finance Minister Choi Sang-mok during the meeting.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]