Government Strengthens 'Local Tax Support' for Citizens Weary from COVID-19... Deadline Extensions and Tax Audit Deferrals

Local Tax Support Guidelines Notified to Municipalities Nationwide

On the 13th, with 56,431 new COVID-19 cases reported, marking the fourth consecutive day of over 50,000 cases, citizens waiting to get tested are lined up at a temporary screening clinic set up in World Cup Park, Mapo-gu, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Lim Cheol-young] The Ministry of the Interior and Safety announced on the 14th that it will continue to provide local tax support such as deadline extensions, collection deferrals, and tax audit postponements this year to support citizens exhausted by COVID-19 and revitalize the stagnant local economy.

The Ministry of the Interior and Safety has been providing support to ease local tax burdens amounting to 16.29 million cases and 1.9672 trillion KRW from February 2020 to the end of last year for taxpayers struggling due to COVID-19. On this day, the ministry provided guidelines including major support targets and methods by local tax categories, as well as best practices.

This local tax support will be focused on self-employed and small business owners affected by social distancing measures such as business hour restrictions, and individuals facing economic difficulties due to confirmed cases or self-quarantine.

First, for declaration tax items such as acquisition tax, local income tax, and resident tax business place portion, the reporting and payment deadlines can be extended within six months (one extension, up to one year) either by the local government head’s authority or taxpayer application. For levy and notice tax items such as property tax and automobile tax, local governments will be recommended to defer collection or issue installment notices for already notified or upcoming local taxes to reduce taxpayer burdens.

Additionally, for taxpayers experiencing business downturns, it is recommended to postpone tax audits upon application or ex officio, and to flexibly operate methods and timing such as using document-based audits depending on regional circumstances. In Cheongju City, tax audits were postponed for Company ‘Ga’, which experienced a sharp decline in sales due to COVID-19, while Company ‘Na’ underwent document-based audits to reduce audit burdens.

To actively induce local governments to reduce local taxes for small and medium enterprises and small business owners, the exemption amount from local government ordinances due to infectious disease response has been improved to be excluded from the ‘total local tax exemption limit.’ Jeju Province implemented an exemption policy for acquisition tax, property tax, and local resource facility tax on temporary buildings directly used for COVID-19 quarantine such as screening clinics.

Meanwhile, the Ministry of the Interior and Safety urged local governments to actively promote taxpayer rights protection systems such as taxpayer protection officers and village tax accountants to ensure no local residents are left out in local tax administration. Minister Jeon Hae-cheol said, “I hope this support will be of some help to citizens struggling with the prolonged COVID-19 situation,” and called for active participation from local governments.

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