Medium-Sized Business Sector: "Electric Power Industry Infrastructure Fund Burden Rate Highest in Last 3 Years"

Kim Ki-moon, President of the Korea Federation of Small and Medium Business

[Asia Economy Reporter Donghyun Choi] The small and medium-sized enterprises (SMEs) sector has been found to feel a significant burden from the increase in the Electricity Industry Infrastructure Fund.

The Korea Federation of SMEs announced the results of the "2022 SME Burden Fee Survey" conducted on 300 SMEs on the 20th. According to the survey, 58.3% of SMEs identified the 'Electricity Industry Infrastructure Fund burden fee' as the fee with the highest increase in burden rate over the past three years. The Electricity Industry Infrastructure Fund is a fund collected by the government by adding 3.7% to all electricity bills from citizens and companies. It is used to reduce power costs and stabilize power supply and demand.

Regarding the appropriateness of the burden fees, 53% of SMEs responded that the Electricity Industry Infrastructure Fund burden fee was burdensome, while 57.6% and 51.5% of SMEs found the 'Waste Disposal Burden Fee' and 'Recycling Levy' burdensome, respectively.

This survey covered the appropriateness of burden fees, the burden fee with the highest increase in burden rate over the past three years, the total amount of burden fees spent in 2022, and necessary improvements to the burden fee system.

The average total burden fee paid by SMEs this year was 6,596,000 KRW, and 48.3% of SMEs responded that the total burden fee was burdensome. Manufacturing industries spent an average of 8.8 million KRW, while non-manufacturing industries spent an average of 1.36 million KRW.

For improvements to the burden fee system, respondents cited 'rate reduction for major burden fees' (24.7%) and 'differential application of burden rates by company size' (24.7%).

Choomun Gap, Head of the Economic Policy Division at the Korea Federation of SMEs, stated, "Considering the prolonged COVID-19 pandemic along with the complex economic crisis of high inflation, high interest rates, and high exchange rates, policy support such as lowering the rates of major burden fees is necessary. In particular, electricity rates increased by an average of 17.9% this year, but the burden rate of the Electricity Industry Infrastructure Fund, which is mandatorily imposed at 3.7% of the electricity bill, has not changed for over 15 years, increasing the burden on SMEs, so improvement is needed."

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