Tax breaks lead to more hiring of regulars: report

By Yonhap
  • Published : Sept 15, 2017 - 09:52
  • Updated : Sept 15, 2017 - 09:52
South Korean companies increased hiring of regular workers by more than 14,000 in 2015 in return for government tax benefits, a report said Friday.

A total of 2,164 large businesses and smaller companies applied for tax credits after employing a combined 14,109 young regular workers that year, according to the report from the Korea Institute of Public Finance.

The companies hired an average 3.2 young regular employees, with large companies increasing the most with 16.4 workers.

The amount of total tax credit applications was estimated at 54.1 billion won ($47.6 million) for 2016, which is anticipated to increase to 87.7 billion won this year.

In a bid to tackle high youth unemployment, the government introduced a tax-benefit plan, which allows SMEs to have 10 million won in income or corporate taxes deducted for one regular worker employed. Comparable tax benefits amount to 3 million won for big businesses.

South Korea remains gripped by the nagging problem of lofty youth unemployment as companies are unwilling to hire amid a prolonged economic slump. In July, the unemployment rate for people aged 15-29 stood at 9.3 percent, slightly up from 9.2 percent a year earlier but down from June's 10.5 percent. (Yonhap)