"4th Disaster Relief Fund Should Also Be Provided to Individual Businesses and Corporations with Fewer Than 10 Employees"

Industrial Research Institute Report

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kwon Haeyoung] There is a claim that when providing the 4th disaster relief fund to small business owners affected by COVID-19 social distancing measures, individual businesses with 5 to 9 employees and corporate small business owners should be added to the support targets.

On the 19th, the Korea Institute for Industrial Economics and Trade (KIET) made this claim in a report titled "Key Issues and Improvement Measures for Business Classification Criteria to Support Small Business Owners."

Previously, during the 2nd and 3rd disaster relief fund distributions, 500,000 to 3 million KRW was provided to small business owners subject to gathering bans, business restrictions, or sales decline (general industries). However, by using the small business owner criteria during budget execution, individual business owners with 5 to 9 employees among small business owners affected by COVID-19 were fundamentally excluded.

According to the report, the current legal standard for small business owners requires fewer than 10 regular employees in four industries: mining, manufacturing, construction, and transportation, and fewer than 5 in other general industries. Even if an individual business with 5 to 9 employees does not exceed the small enterprise sales standard, general industries are classified as small enterprises. The issue is that the average sales of individual and small enterprises with 5 to 9 employees in general industries range from 810 million to 1.31 billion KRW, which is not significantly different from the average sales of individual and small business owners with 5 to 9 employees in the four industries of mining, manufacturing, construction, and transportation, which range from 770 million to 1.27 billion KRW.

Gil Eunseon, a senior researcher at KIET, pointed out, "The 2nd and 3rd disaster relief funds limited the recipients to small business owners and individual businesses, fundamentally excluding 74,000 individual businesses with 5 to 9 employees and 254,000 corporate small business owners." She added, "Starting from small businesses with fewer than 10 employees, individual businesses with 5 to 9 employees and corporate small business owners should be added to the support targets," emphasizing, "By verifying workers' employment status and income, more effective support can be provided to those directly affected by COVID-19."

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