New Year Supplementary Budget of 14 Trillion Won... 3 Million Won for Small Business Owners

Hong Nam-ki Deputy Prime Minister "Deeply Apologize for Excessive Surplus Tax Revenue"

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is speaking at the government joint briefing on the extension of quarantine measures and support for small business owners held on the morning of the 14th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[Sejong=Asia Economy Reporter Kim Hyun-jung] The government has officially announced the preparation of a supplementary budget (추경) worth 14 trillion won. As the social distancing policy to respond to COVID-19 is extended, an additional support of 3 million won will be provided to small business owners whose sales have decreased due to quarantine guidelines. Most of the supplementary budget funds will be covered by issuing deficit bonds, and excess tax revenue will be used once the settlement procedures are completed. The supplementary budget plan was finalized just one day after announcing that the excess tax revenue is expected to be about 10 trillion won more than the forecast made in November last year, making the unprecedented "January supplementary budget" a reality.

On the 14th, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki announced the small business quarantine support plan following the extension of social distancing at the Government Seoul Office. Deputy Prime Minister Hong said, "We are looking at about 14 trillion won mainly for support to self-employed and small business owners who are facing difficulties due to strengthened quarantine measures, and for expanding quarantine capacity such as securing hospital beds," adding, "The biggest background of this supplementary budget is to quickly return the excess tax revenue collected more than expected to support self-employed and small business owners in urgent need." He apologized, saying, "I bow my head and apologize" for the excessive excess tax revenue caused by misprediction.

He added, "We will provide an additional 3 million won each to small business owners and self-employed whose sales have decreased to alleviate fixed costs such as rent and labor costs and to maintain their livelihood," noting that "the scale will reach about 10 trillion won." Along with this, the loss compensation amount for businesses restricted by business suspension was also increased by 1.9 trillion won to a total of 5.1 trillion won.

The government plans to prepare this supplementary budget by next week, complete the Cabinet meeting approval, and submit it to the National Assembly in the last week of this month before the Lunar New Year holiday.