Emergency Disaster Relief Fund Distributed Nationwide... Tax Deduction for Donations (Comprehensive)

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is attending the Cabinet meeting held at the Government Seoul Office on the 21st. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Joo Sang-don] The government has decided to provide emergency disaster relief funds to all citizens nationwide. About three weeks after announcing on the 30th of last month that the relief funds would be limited to the bottom 70% income bracket, the policy was changed to provide funds to all citizens. However, to encourage voluntary donations from high-net-worth individuals, tax deductions for donations will be applied if they choose not to apply for the support funds or decide to donate after receiving them.

On the 23rd, the Ministry of Economy and Finance stated, "It was discussed to provide funds to all citizens, but allow those in the top 30% income bracket and others to voluntarily choose not to apply for the support funds or to donate even after applying, and the ruling party, government, and Blue House agreed on this."

A ministry official explained, "Considering the urgent nature of finalizing and distributing the emergency disaster relief funds as soon as possible, the political calls for 100% distribution, and the alternative nature of utilizing donation resources from the top 30% for more valuable causes, all factors were comprehensively taken into account."

Earlier, Prime Minister Chung Sye-kyun expressed his position right after the ruling party, the Democratic Party of Korea, announced a coordination plan among the party, government, and Blue House, saying, "If a system enabling voluntary donations from high-income earners is established in the National Assembly, the government will accept it." However, following media reports quoting some Ministry of Economy and Finance officials stating, "The agreement was between the party and the Prime Minister, the ministry is not involved," and "The ministry's position has not changed," on the 23rd, Prime Minister Chung warned the ministry, calling it "an undesirable situation." Under this pressure, the ministry eventually shifted to the policy of providing disaster relief funds to all citizens nationwide.

The Ministry of Economy and Finance plans to secure additional funding through issuing government bonds. Legal supplements such as enacting or amending laws to collect donations will also be pursued. If individuals voluntarily choose not to apply for the support funds or donate after applying, tax deductions for donations will be applied according to the Income Tax Act and related laws.

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