87.8% of Small and Medium Enterprises Say "Tax Support Systems Help Business Activities"

Junggi Joonganghoe Announces Survey on SME Taxation, Tax Administration Usage, and Difficulties

[Asia Economy Reporter Kim Cheol-hyun] A survey found that 9 out of 10 small and medium-sized enterprises (SMEs) utilizing tax support systems reported that these systems help their business activities. The Korea Federation of SMEs (Chairman Kim Ki-moon) announced on the 27th that it conducted the '2020 Survey on SME Taxation and Tax Administration Usage and Difficulties' targeting 500 SMEs.

87.8% of SMEs using tax support systems responded that these systems help their business activities. The most helpful tax support programs were 'Special Tax Reduction for SMEs' (39.2%), 'Tax Credit for Research and Human Resource Development Expenses' (34.2%), and 'Tax Credit for Employment Creation Investment' (17.7%), in that order.

The tax reform bill for 2020 included a system expected to benefit SMEs, with 'Establishment of Integrated Investment Tax Credit' (44.8%) being the most anticipated. To enhance the effectiveness of tax support, respondents indicated the need for 'Expansion of Support Targets' (51%) and 'Increase in Reduction Rates' (32.4%).

55% of SMEs expressed satisfaction with the National Tax Service's administrative services. The tax administration support programs that helped this year were 'Expansion of Mobile Hometax Service' (65%), 'Reduction of Tax Audit Burden' (14.4%), and 'Expansion of Taxpayer Communication' (9.8%). Regarding areas where tax administration support should be expanded, respondents hoped for 'Reduction of Tax Audits' (46.2%) and 'Expansion of Non-face-to-face Services' (38.6%).

The most challenging aspect when responding to tax audits was 'Frequent Tax Law Amendments and Lack of Understanding' (41.2%). Other difficulties included 'Complexity of Tax Adjustments and Submission Documents' (32.8%) and 'Lack of Accounting Professionals' (12.8%).

Kim Ki-moon, Chairman of the Korea Federation of SMEs, said, "Due to the recent resurgence of COVID-19, the business environment for SMEs is very precarious. We hope that bold SME tax support measures, such as expanding the scope of tax support and increasing reduction rates, will be prepared so that SMEs can overcome these difficult times well."