200 Billion Won Support of 500,000 Won Each for 40,000 Street Vendors
Support Funds Provided When Unregistered Street Vendors Register Their Business
In September last year, Choi Eulsang, former chairman of the National Federation of Street Vendors, spoke at the "Press Conference of Street Vendor Organizations Urging Measures for the Livelihood of Urban Poor and Street Vendors in the COVID-19 Disaster Era" held at the Cheongwadae Fountain Plaza in Jongno-gu, Seoul. Photo by Yonhap News
[Asia Economy Reporter Kim Heeyoon] Street vendors who were excluded from government support policies for small business owners due to lack of business registration will now be able to receive COVID-19 disaster relief funds.
The Ministry of SMEs and Startups announced on the 5th that it will provide 500,000 KRW in income stabilization support funds to street vendors.
The income stabilization support fund is available to street vendors managed by local governments who have ▲road occupancy permits ▲business registration ▲membership in merchant associations or payment of facility usage fees, and who have completed business registration under the Value-Added Tax Act after March 1 of this year.
Street vendors who registered their business before March 1 are excluded from this income stabilization support fund as they are already eligible for existing disaster relief funds such as the New Hope Fund and the Support Fund.
The reason for limiting the income stabilization support fund recipients to street vendors managed by local governments who have completed business registration lies in the nature of their business operations.
According to the Ministry of SMEs and Startups, street vendors usually do not have business registration, making it difficult to publicly verify their past business activities, and they violate the business registration obligation under the Value-Added Tax Act. Therefore, conditions were set for support eligibility to enable official verification of business status and to resolve the legal violation.
Street vendors who meet the support conditions can apply at their local city, county, or district office after registering their business at the relevant tax office based on their registered address, and receive support without a separate review. Additionally, this support will not be paid concurrently with other support programs such as the Ministry of Health and Welfare’s temporary livelihood support fund.
The Ministry explained that although small street vendors tend to avoid business registration due to tax burdens, the tax burden from business registration is expected to be minimal due to exemptions such as simplified taxpayer VAT exemption. Furthermore, registering a business allows them to enter the formal system and utilize various government support programs, which will provide greater benefits.
Minister Kwon Chilseung of the Ministry of SMEs and Startups said, “Street vendors without business registration have been in a blind spot for policy support, but we are relieved to be able to ease their difficulties somewhat through this income stabilization support fund.” He added, “We will review small business policies again to ensure there are no blind spots like street vendors and strive to be a reliable support for small business owners.”
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