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Seoul to offer tax benefits to SMEs with virus losses

Government promises tax benefits for affected businesses, strong measures to prevent monopolies of masks and sanitizers

Deputy Prime Minister and Finance Minister Hong Nam-ki chairs a meeting of economy-related ministers on Wednesday at Seoul Government Complex. (Yonhap)
Deputy Prime Minister and Finance Minister Hong Nam-ki chairs a meeting of economy-related ministers on Wednesday at Seoul Government Complex. (Yonhap)

The South Korean government said Wednesday that it will offer special tax benefits to owner-operators and small businesses, in an effort to minimize the economic impact of the new coronavirus outbreak.

It also vowed to prevent mass outbound shipments of face masks and hand sanitizers, of which supplies are running low amid the increasing number of confirmed cases here.

“(The government) will prescreen the mass outbound shipments by changing export procedures for masks and hand sanitizers,” said Deputy Prime Minister and Finance Minister Hong Nam-ki in a meeting of economy-related ministers at the Seoul Government Complex.

The meeting was attended by Welfare Minister Park Neung-hoo, Labor Minister Lee Jae-kap, Land Minister Kim Hyun-mee, SME Minister Park Young-sun, Financial Services Commission Chairman Eun Sung-soo and Korea Customs Service Commissioner Roh Suk-hwan.

Normally, preregistered business-to-customer exporters have access to simplified customs procedures. In light of recent circumstances, however, outbound shipments of more than 1,000 units or 2 million won ($1,685) worth of masks and sanitizers will have to follow regular procedures.

“For (exporters) suspected of cornering and hoarding, we shall hold the customs clearance process and request prosecution of the case,” the fiscal chief said.

Also, authorities effectuated a special market regulation banning the monopolization of masks and hand sanitizers, which is punishable by up to two years in jail or a fine of 50 million won. A pan-government control team, comprising the National Police Agency and the Korea Customs Service, will be in charge of surveillance.

The government also confirmed its plans to alleviate the tax burden for owner-operators and small businesses struggling with the effects of the coronavirus outbreak and consequent shutdowns.

“The government will immediately push ahead with plans to extend the due date of local taxes or hold the delinquency execution (in necessary cases),” Hong said.

Depending on the type and size of the business, SMEs and owner-operators may have their tax payment due dates extended by a maximum of 12 months, or even have their tax investigations halted or postponed.

For those experiencing losses as a result of the shutdown of Chinese manufacturers, the government will offer special round-the-clock customs clearance procedures, he added.

Seoul has been keeping a close watch on industries that were directly impacted by the virus -- exporters, hotels, restaurants and transportation services. As of Wednesday, Asia’s fourth-largest economy has 18 confirmed cases of the virus, which originated in the central Chinese city of Wuhan. The virus has so far killed about 490 people in China’s Hubei province, of which Wuhan is the capital.

By Bae Hyun-jung (