Both Parties Rapidly Propose 'Saving Self-Employed' Bills... What About the Supplementary Budget?

Discussion on Direct Rent Support Surges... Representative Lee Nak-yeon Cautious About Supplementary Budget

[Image source=Yonhap News]

[Asia Economy Reporter Park Cheol-eung] The ruling and opposition parties are rushing to propose legislative bills to save self-employed business owners in crisis. These include measures for the government to directly support rent payments or to reduce the tax burden on commercial property owners (lessors) who lower rents. Within the Democratic Party of Korea, the need for a supplementary budget (supplementary budget) early next year has been mentioned, but party leader Lee Nak-yeon has drawn a line for now.

According to the National Assembly on the 24th, Democratic Party lawmaker Lee Dong-joo, who previously proposed the so-called 'Rent Freeze Act,' introduced an amendment to the Restriction of Special Taxation Act the day before. The core of the bill is to provide income tax or corporate tax deductions to lessors of businesses subject to closure or restrictions who reduce rent.

The Rent Freeze Act previously submitted by Lee effectively forces lessors to reduce rent, which has sparked considerable controversy. Recently, a plan to directly support part of the rent through government funds has been strongly discussed. A bill to support this has also been introduced.

Democratic Party lawmaker Jeon Yong-gi proposed an amendment to the Act on Protection and Support for Small Business Owners on the 22nd, stating, "If a small business owner who rents a commercial building owned by another experiences a certain percentage decrease in sales compared to the same period last year due to an infectious disease outbreak, a basis will be established to temporarily provide direct support for part of the commercial building rent." He pointed out that according to a survey by the Federation of Small Businesses last month, the most urgent measure small business owners desire is 'direct government support for rent.' Jeon also introduced an amendment to the Banking Act allowing commercial lease businesses to request interest rate reductions from financial institutions if they reduce rent.

The opposition parties are also actively involved. People Power Party lawmaker Hong Moon-pyo introduced a bill the day before that includes government support for small business owners' rent. The proposal suggests the government cover 50% for businesses under restriction and 70% for those under closure. Direct support is deemed inevitable.

Chu Kyung-ho, a leading policy expert within the People Power Party, said, "There is a high risk that the management damage to small business owners will become more severe," and introduced a bill that allows a 100% deduction of rent from income tax or corporate tax if rent is voluntarily reduced.

In the case of direct rent support, securing funding is the most critical issue. The government and ruling party are discussing including it in the third disaster relief fund to be paid early next year, but many argue that the support scale should be increased through a supplementary budget. However, the financial authorities are reportedly negative about preparing another supplementary budget from the beginning of the year.

Party leader Lee Nak-yeon also said at a meeting with reporters the day before, in response to questions about the supplementary budget early next year, "Will it happen that quickly?" and added, "It doesn't make sense to spend money when social distancing is tightly enforced now. We need to monitor the COVID-19 situation and act accordingly."

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