Jung Sye-kyun: "Compensation Based on Operating Profit, Not Sales Revenue"

Prime Minister Chung Sye-kyun is speaking at the Policy Discussion with Foreign Correspondents Invited by the Prime Minister held at the Seoul Press Center on the 27th. January 27, 2021.
[Image source=Yonhap News]

[Asia Economy Reporter Son Seon-hee] Prime Minister Chung Sye-kyun said on the 27th regarding compensation for losses of self-employed and small business owners due to COVID-19 quarantine measures, "The compensation is for lost operating profit, not based on sales revenue."

At a policy discussion with foreign reporters held at the Seoul Press Center that afternoon, Prime Minister Chung said, "Some small business owners may have high sales revenue but low profits, while others may have low sales revenue but high profits," adding, "Therefore, loss compensation should be based on operating profit."

Operating profit is calculated by subtracting the cost of goods sold from sales revenue. Thus, even if a certain proportion is compensated, if the basis is operating profit, the actual required funds will be significantly reduced.

Prime Minister Chung explained, "We will make efforts to provide compensation based on the most accurate information realistically available, including tax data held by the National Tax Service."

Furthermore, unlike his statement the previous day regarding loss compensation where he drew a line by saying, "Retroactive application is not being considered," he showed a somewhat reserved stance this day. The private sector, including small business owners who suffered economic damage due to last year's business restrictions and bans, immediately reacted strongly.

Regarding this, Prime Minister Chung said, "There are lawmakers in the National Assembly advocating for retroactive application, and bills have been introduced," adding, "However, since we are just beginning to create laws and systems now, it does not seem wise to discuss specific details."