Small Business Owners Demand "Emergency Relief Livelihood Payments"...Nationwide Scale of 4 Trillion Won per Month

Kim Im-yong, Acting President of the Korea Federation of Micro Enterprise Associations, along with association officials, held an emergency press conference on the 12th at the Korea Federation of Micro Enterprise Associations in Dongjak-gu, Seoul, shouting slogans demanding the guarantee of survival rights in relation to COVID-19 damage cases affecting small business owners. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Moon Hyewon] Small business owners, whose sales have been hit by the novel coronavirus infection (COVID-19), have demanded emergency living expenses of about 4 trillion won per month to be paid to 3.2 million small business establishments nationwide.

The Korea Federation of Small and Medium Business (hereinafter referred to as KFSMB) held a press conference on the 12th at the KFSMB conference room in Dongjak-gu, Seoul, urging the government to seek a plan to provide living expenses of about 1.5 million won per month for three months to 3.2 million small business establishments nationwide (as of the end of last year) whose sales have declined due to COVID-19.

Kim Im-yong, acting president of the KFSMB, along with the federation’s executive members, said, “With the spread of COVID-19, building closures and self-isolation have increased, and telecommuting has expanded, causing people to avoid going out. All gatherings have been canceled, and with the spread of the ‘social distancing’ campaign, the South Korean economy has almost come to a halt.” He added, “Most small business owners who generate sales offline have been directly hit by sales declines across almost all industries and regions.”

According to the KFSMB Big Data Center’s analysis, the population flow in Jung-gu, Seoul, decreased by 80%, from 9.3 million on the 9th of last month to 2 million on the 29th of the same month. During the same period, Suseong-gu in Daegu saw an 85% decrease, from 10 million to 1.5 million.

The executive members stated, “Small business owners have numerous fixed expenses every month, including rent, labor costs, material costs, utility bills, insurance premiums, card fees, and various taxes. If business does not go well for a month, they not only fail to earn wages but also lose hundreds of millions to billions of won, pushing them to the brink of being unable to sustain their stores.”

The KFSMB estimated that about 4 trillion won per month would be required for emergency living expenses. In particular, they demanded that small business owners in the Daegu and Gyeongbuk regions be supported with emergency relief living expenses of about 2 million won per month, which is above the minimum wage.

The executive members also called for a temporary reduction of the current 10% value-added tax (VAT) to 5% in the first half of this year to drastically reduce the tax burden on small business owners. They said, “According to the 2018 Small Business Survey by the Ministry of SMEs and Startups, the average annual sales of small business owners is 203.8 million won, and the average operating profit is only 32.3 million won, which is less than the starting salary of a new employee at a small or medium enterprise. Considering that usually couples run the business together, this means that each person earns less than the minimum wage.” They added, “We should actively seek to raise the simplified taxation threshold to about 150 million won in the long term during this opportunity.”

They also urged the mobilization of all possible tax relief measures, including income tax reductions, reductions in indirect taxes such as electricity and water bills, and support or reductions in the four major social insurance premiums.

Additionally, they demanded ▲the establishment of measures to ease the burden of existing loans ▲support measures to maintain employment for small business owners with fewer than five employees ▲and support for purchasing hygiene and quarantine equipment.

This content was produced with the assistance of AI translation services.