A Bipartisan Call for Rent Burden Relief... Government Likely to Accelerate Funding Review

Expansion of Tax Credits and Calls for Direct Cash Support for Rent
Government Reports Overseas Support Cases to Ruling Party

On the 20th, when 1,097 new cases of COVID-19 were confirmed, marking the highest number since the outbreak in the country, Myeongdong Street in Jung-gu, Seoul, appeared quiet. Photo by Jinhyung Kang aymsdream@

[Sejong=Asia Economy Reporter Kim Hyunjung] As the new coronavirus infection (COVID-19) resurges, causing increasing damage to self-employed individuals and small business owners, bipartisan support measures to alleviate rent burdens are pouring out in the National Assembly. The government is also facing an inevitable situation to consider preparing response measures, including the formulation of an additional supplementary budget (supplementary budget) early next year.

According to the National Assembly Legislative Information System on the 27th, five partial amendment bills to the Restriction of Special Taxation Act, providing tax credit benefits to reduce the rent burden on small business owners, have been proposed by both ruling and opposition parties this month.

Among them, Representative Park Hong-geun of the Democratic Party, who serves as the Democratic Party's secretary on the Special Committee on Budget and Accounts, proposed a related bill that grants a 100% tax credit on the discount amount to store owners whose stores were subject to closure orders due to government quarantine measures, regardless of the business scale, if the landlord discounts the rent. The bill expands the tax credit rate from the current 50% to 70% when landlords reduce rent for small business tenants and extends the tax credit period until December 31, 2021.

In particular, the bill includes provisions to allow a 100% tax credit on rent reductions for businesses subject to closure orders due to enhanced social distancing measures, and an 85% tax credit for businesses under gathering restriction orders, applicable to income and corporate taxes. The same benefits apply to medium-sized or larger restaurants and wedding halls.

On the 3rd, as the third wave of the novel coronavirus infection spreads, quarantine measures in the metropolitan area are being strengthened to curb the spread, and shops on Myeongdong Street in Jung-gu, Seoul are closing down. Photo by Jinhyung Kang aymsdream@

Earlier, Representatives Lee Dong-joo of the Democratic Party and Chu Kyung-ho of the People Power Party proposed similar bills, and Representative Jeon Yong-gi of the Democratic Party also stated through an amendment to the Small Business Protection and Support Act that "if a small business owner renting a commercial building owned by another experiences a certain percentage or more decrease in sales compared to the same period last year due to an infectious disease outbreak, a temporary basis for direct support of part of the commercial building rent will be established." Representative Jeon also proposed an amendment to the Banking Act allowing commercial lease business operators to request interest rate reductions from financial institutions if they reduce rent.

The opposition party is also pushing for direct rent support. Representative Hong Moon-pyo of the People Power Party recently proposed a bill for government support of small business rent, suggesting that the government share 50% of the rent for businesses under gathering restrictions and 70% for those under closure orders.

Although the government has not yet announced an official direction, it is known to be reviewing various measures, including indirect rent support through expanding disaster relief payments and direct rent support. The Ministry of Economy and Finance recently compiled cases of rent-related tax credits and direct cash support overseas and reported them to the ruling party.

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