Welfare Sharing System Expansion Pledge
[Asia Economy Reporter Naju-seok] Yoon Seok-yeol, the presidential candidate of the People Power Party, pledged on the 22nd to implement a ‘Welfare Sharing System’ aimed at reducing the welfare gap between small and medium-sized enterprises (SMEs) and large corporations. Under this system, if large corporations share their welfare programs with SMEs, the expenses will be considered welfare expenditures for their own employees, thereby expanding tax credits.
On this day, Candidate Yoon announced the ‘Expansion of the Welfare Sharing System between Large Corporations and SMEs’ as part of his ‘Seok-yul’s Heart-throbbing Promise’ campaign.
According to the plan, through the ‘Expansion of the Welfare Sharing System,’ employees of SMEs will be able to use the welfare programs of large corporations, and large corporations will receive tax benefits and other incentives for voluntary participation. For example, if SME employees use welfare facilities such as condos affiliated with large corporations, the expenses will be regarded as welfare expenditures for the large corporation’s own employees, qualifying for tax credits.
Candidate Yoon pointed out that the gap in welfare, as well as wages, between large corporations and SMEs has widened, and this pledge aims to narrow that gap. According to the Korea Institute for Small and Medium Enterprises and Startups Development, the average wage ratio of SMEs compared to large corporations (set at 100) decreased from 63.5% in 2010 to 58.8% in 2020, a drop of 4.7 percentage points. The welfare cost ratio of SMEs compared to large corporations fell dramatically from 58.6% in 2010 to 39.8% in 2020, a decrease of 18.8 percentage points.
Candidate Yoon stated, "Through the ‘Expansion of the Welfare Sharing System,’ SME employees will be able to use the welfare programs of large corporations, and large corporations will receive tax benefits and other incentives for voluntary participation," adding, "If the ‘Welfare Sharing System’ is established, it is expected to have a twofold effect of significantly improving the welfare level of SME employees without a huge fiscal burden."
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