Hong Nam-ki: "12.7 Trillion Won Total Mobilization for Livelihood Measures... 6-Month Extension of Vehicle Individual Consumption Tax Cut" (Update)

Emergency Economic Central Countermeasures Headquarters Meeting

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Son Seonhee] The government announced on the 23rd that it will implement a livelihood support plan worth more than 12.7 trillion won by mobilizing this year's excess tax revenue and the existing budget. In addition, the reduction measure of the individual consumption tax (ICT) on passenger cars, which was originally scheduled to end within the year, will be extended until June next year.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, held an emergency central economic countermeasure meeting at the Government Seoul Office in the morning and stated, "We plan to concentrate all policy efforts on supporting small business owners affected by COVID-19, stabilizing livelihoods, and revitalizing domestic demand while paying attention to quarantine conditions during the remaining period of the fourth quarter."

First, for small business owners, a total of 9.4 trillion won in measures has been prepared, focusing on those not included in the loss compensation target industries despite suffering significant damage from the COVID-19 crisis, including ultra-low interest loan support. Deputy Prime Minister Hong said, "For industries restricted in personnel and facility use among the non-loss compensation target industries, we will newly supply 2 trillion won of 'Special Recovery Loans' with the lowest interest rate ever of 1.0% and a limit of 20 million won." He added, "For tourism fund loans targeting travel and accommodation industries, the interest rate will be temporarily reduced by up to 1 percentage point on the entire loan balance this year (3.6 trillion won), and a one-year principal repayment deferral will also be supported."

He also added, "For about 940,000 companies, including 140,000 companies with decreased sales and 800,000 companies eligible for loss compensation among industries restricted in personnel and facility use, we will reduce part of the electricity bill (50%) and industrial accident insurance premium (30%) for two months." However, this will be applied up to a maximum of 200,000 won.

Additionally, 1.3 trillion won will be reinforced for job-seeker allowance support funds, and the target for the Tomorrow Learning Card support will be expanded from the existing 480,000 people to 545,000 people, an increase of 65,000. A total of 1.4 trillion won will be invested to meet the increased demand for vocational training and reduce the burden on low-income households, including raising the unit price of energy vouchers for low-income groups.

In particular, Deputy Prime Minister Hong decided to extend the ICT reduction on passenger cars, which was scheduled to end at the end of this year, to continue the momentum of revitalizing domestic demand. This decision also considered the recent delay in passenger car delivery due to semiconductor supply disruptions. Hong explained, "We intend to take measures so that consumers who purchased vehicles this year but whose vehicles will be delivered in the first half of next year can also reduce their purchase costs."

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