Despite COVID-19 Business Losses... 61.4% of Small Business Owners 'Did Not Use Support Programs'

Survey by Korea Federation of SMEs
Desire for Tax Burden Relief and More

Source=Korea Federation of SMEs

[Asia Economy Reporter Kim Daeseop] Despite the business damages caused by the spread of the novel coronavirus infection (COVID-19), 61.4% of small business owners did not utilize the government's COVID-19 support programs. This indicates a need for more active promotion of support programs for small business owners.

According to the Korea Federation of Small and Medium Business (KOSME) on the 17th, the survey on "COVID-19 Related Small Business Policy Issues" revealed that 61.4% answered that they did not use support programs this year (multiple responses allowed). The reasons for not using the programs included "not knowing that support measures existed" (44.3%) and "application procedures and document preparation are complicated" (24.8%).

Small business owners who utilized government support programs this year accounted for 38.6%. The most commonly used programs were "Yellow Umbrella Mutual Aid" (32.2%), "Zero Pay" (6.6%), "General Business Stabilization Fund" (3.2%), and "Employment Insurance Premium Support for One-Person Self-Employed" (1.0%).

Source=Korea Federation of SMEs

Regarding the most needed support measures for small business owners (multiple responses allowed), 61.4% hoped for "tax burden relief," 58.4% for "expanded financial support," and 9.6% for "promotion of consumption of small business products and services." As for the policy directions that should be prioritized in the future, respondents cited "expansion of consumption promotion support such as increased income tax deductions for credit/debit cards" (43.4%), "expanded support for marginal companies through tax funding" (35.2%), and "strengthening regulations and supervision to restrict large corporations' entry into small business sectors" (9.2%).

Additionally, the bills that the 21st National Assembly should pass first for small business owners (multiple responses allowed) were "relief of commercial rent burden" (43.0%), "protection of alleyway commercial districts and small and medium-sized business sectors" (41.4%), "expansion of social safety nets for small business owners" (35.0%), and "supplementing minimum wage and working hours reduction" (28.2%).

The most effective support measure for small and medium-sized business owners receiving government COVID-19 support was "expansion of loan and guarantee support" (40.0%). This was followed by "tax credit for rent reduction" (23.2%), "expansion of income tax deduction rates for credit/debit cards" (14.4%), "expansion of employment retention subsidies" (12.4%), and "expansion of simplified taxpayer scope" (8.2%).

Source=Korea Federation of SMEs

Among small business owners who utilized COVID-19 financial support (18.4% of the total), 92.3% responded that "government financial support helped their business." Notably, 100% of respondents who were "one-person small business owners" without employees reported receiving help.

This survey was conducted from the 27th of last month to the 8th of this month, targeting 500 small business owners in wholesale and retail, food service, lodging, and other service industries.

Choo Moon-gap, Head of the Economic Policy Division at KOSME, stated, "As small business owners are demanding continuous and systematic policy implementation to resolve financial difficulties and promote consumption due to the spread of COVID-19, it is necessary to respond appropriately to changing situations in preparation for the prolonged COVID-19 crisis. KOSME will also do everything possible to support economic sentiment recovery and boost domestic demand, including promoting campaigns for the recovery of the livelihood economy."

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