[Exclusive] Democratic Party Begins Reviewing National Tax Service Rental Fee Data... "Supplementary Budget If Necessary"

Considering Partial Rent Sharing with Fiscal Investment Alongside Tax Reduction

[Image source=Yonhap News]

[Asia Economy Reporter Park Cheol-eung] The ruling party has begun to seriously consider a plan to provide financial support to landlords who do not charge rent or reduce rent.

They have already started to grasp the current rent status through the National Tax Service. This is to secure basic data for reviewing additional tax reductions for landlords who stop or reduce rent, as well as a plan to directly share part of the rent through government finances.

If the required funds amount to several hundred billion won, they plan to maximize the third disaster relief fund; however, if it is judged that trillions of won are needed, they will also consider a supplementary budget (Chugyeong). Given the serious situation where social distancing level 3 is being discussed, they believe that the existing 'Good Landlord' campaign alone is insufficient.

Park Hong-geun, the ruling party's secretary of the National Assembly Budget and Accounts Special Committee, said in a phone interview with Asia Economy on the 18th, "We need to consider not only tax benefits but also a method where the government shares rent through finances."

He added, "We need to pull more from the contingency fund beyond the 3 trillion won allocated for the third disaster relief fund, but since the budget has specific purposes such as additional vaccine purchases, there are limits. We are trying to understand the overall rent level, and if the amount to be supported exceeds several hundred billion won and reaches trillions, then supplementary budget discussions will inevitably be necessary." The Justice Party also proposed the day before that landlords, tenants, and the government each bear one-third of the rent.

Lee Dong-ju, who proposed the so-called 'Rent Freeze Act,' requested rent status data from the National Tax Service. Lee said, "We requested data on commercial rental income business operators from the past 3 to 5 years from the National Tax Service. Once we receive the data, we will have full discussions with the Ministry of Strategy and Finance regarding tax reductions."

The National Tax Service data will be used as a basis not only for tax reductions but also for estimating the scale of direct rent support. Lee said, "Compared to the situation when the spread occurred due to the Liberation Day rally last summer, the transmission power is much higher now. We need to analyze the National Tax Service data, but personally, I think the third disaster relief fund should be paid first, followed by discussions on the supplementary budget."

The third relief fund is expected to provide about 1 million to 2 million won to small business owners in industries where operations were banned or restricted, similar to the second relief fund. Besides the 50 billion won carried over from the second relief fund that was not paid, the contingency fund available for additional use is estimated to be about 50 billion won. If a direct rent-sharing method through finances is additionally adopted, even if limited to crisis industries, it is likely to be grossly insufficient.

Park said, "It is still too early to take the social distancing level 3 upgrade as a given and discuss supplementary budget preparation. Of course, if it goes to level 3, a comprehensive review of support policies will be necessary. For now, we are at an early stage of discussion on whether to add contingency funds to the third relief fund for rent support, or whether a supplementary budget is needed, and whether the government can decide on tax reductions." He added, "If tax reductions alone can alleviate the burden on landlords to some extent, a separate budget may not be necessary."

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