Transition Team: "54 Trillion Won in COVID Losses for Small Businesses... Support Payments to 5.51 Million Locations" (Update)

Ahn Cheol-soo, Transition Committee Chairman, Announces COVID-19 Compensation Plan for Small Business Owners
5.51 Million Small Businesses and Enterprises Affected by Quarantine Measures...Estimated Losses of 54 Trillion Won

[Image source=Yonhap News]

[Asia Economy Reporters Kim Hyemin and Lee Gimin] The Presidential Transition Committee (PTC) has decided to provide damage compensation payments immediately upon the passage of the supplementary budget bill to 5.51 million small business owners and small enterprises affected by COVID-19 quarantine measures. The PTC estimates the total loss at approximately 54 trillion won and will compensate losses differentially, considering damages by industry.

On the 28th, PTC Chairman Ahn Cheol-soo announced the COVID-19 loss compensation plan for small business owners at the PTC office in Tongui-dong, Jongno-gu, Seoul.

The PTC estimated that 5.51 million small business owners and small enterprises suffered losses amounting to about 54 trillion won due to COVID-19 quarantine measures during 2020-2021. This estimate was derived by first classifying small business owners and small enterprises according to the Basic Statistics of Small and Medium Enterprises, then selecting businesses whose sales decreased compared to 2019 before the pandemic, and finally calculating the reduction in operating profit caused by quarantine measures.

The PTC stated that once the supplementary budget is passed, damage compensation payments will be provided differentially by comprehensively considering the size of each business, the extent of damage, and industry-specific impacts. The current government has already paid a total of 31.6 trillion won to 18.43 million places over seven rounds. The PTC also decided to include travel and performance industries in the damage compensation targets and provide support. Additional support measures will be considered for businesses with large-scale damages.

Additionally, the PTC plans to raise the correction rate (currently 90%) and the minimum amount (currently 500,000 won) of small business loss compensation payments for the first and second quarters of this year by June. This decision responds to criticisms that the loss compensation payments are insufficient compared to actual losses and that many small businesses with low sales receive only the minimum amount, which does not provide substantial help.

Chairman Ahn emphasized, "We will reform the system into a full loss compensation system that covers the entire decrease in operating profit," and added, "We will also establish reasonable loss compensation standards to prepare for future pandemics."

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