Government Announces Deferral of Electricity and City Gas Bill Payments for Small Business Owners from July to September (Supplement)

Emergency Economic Central Countermeasures Meeting and Innovation Growth Strategy Meeting
Complete Abolition of Paper Promissory Notes After 2023... Electronic Promissory Note Maturity Shortened to 2 Months

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is presiding over the 38th Emergency Economic Central Countermeasures Headquarters meeting and the 4th Innovation Growth Strategy meeting of 2021 held at the Government Seoul Office Building on the 18th. 2021.6.18 [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Son Seon-hee] The government announced on the 18th that it will defer the payment of social insurance premiums for small-scale businesses and electricity and city gas bills for small business owners from July to September this year.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, presided over the Emergency Economic Central Countermeasures Headquarters meeting and the Innovation Growth Strategy meeting at the Government Seoul Office on the same day, stating, "We are reviewing the second supplementary budget (supplementary budget) to support economic recovery and assist small business owners. However, even before the supplementary budget, we will implement some immediate reinforcement measures to alleviate the difficulties of small business owners and SMEs," he said.

First, for small-scale workplaces with fewer than 30 employees, one-person self-employed individuals, and special-type workers' workplaces, the payment of employment and industrial accident insurance premiums for July to September will be deferred. Additionally, electricity bills for 3.2 million small business owners and city gas bills for 1.5 million vulnerable households and 720,000 small business owners will be deferred for the same period. This extends the original deferral, which was until the end of this month, through the third quarter. Furthermore, for those with reduced income, the payment of national pension premiums for July to September will be exempted.

The scope of the tax credit applied to so-called "Good Landlords," who reduce store rent for small business tenants affected by COVID-19 quarantine measures, will also be expanded. This tax credit deducts 70% of the rent reduction amount from income tax or corporate tax, and it will now apply even if the small business owner has closed but the lease period remains. The Good Landlord tax credit is valid until the end of this year. In addition, the rent reduction and payment deferral measures for national and public property and public institution-owned property, which were scheduled to end this month, will be extended until the end of the year.

Originally, the government announced the '2022 Budget Formulation Guidelines' last March, indicating that it would re-examine the increased projects that were temporarily expanded last year in response to the COVID-19 crisis on a 'zero base.' As a full-scale economic recovery phase is expected from the second half of this year, the intention is to normalize fiscal spending in preparation for the 'post-COVID' era.

However, while external conditions such as exports and investment are recovering rapidly, the actual perception of economic recovery on the ground remains slow, leading to the decision to reinforce existing temporary support projects. Deputy Prime Minister Hong said, "As COVID-19 prolongs, face-to-face industries such as food service, lodging, arts, and sports continue to suffer," adding, "In particular, the perception of economic recovery among small business owners and SMEs is slow." He continued, "We will ensure the prompt execution of related existing budgets and carefully review the parts that must be reinforced in the second supplementary budget."

Meanwhile, the meeting also discussed the 'Bill System Reform and Innovative Finance Activation Plan' and the 'Development Plan for Ultra-small Satellites and 6G Satellite Communication Technology.' From 2023 onwards, the government plans to completely abolish promissory notes and shorten the maturity of electronic promissory notes issued by large corporations from the current three months to two months to support early cash conversion of bills.