[Chuseok Livelihood Measures] Temporary Doubling of Income Deduction for Increased Spending at Traditional Markets in the Second Half of the Year

Government Discusses Measures at Economic Ministers' Meeting
Exemption of Toll Fees on Highways During Chuseok... Discounts on KTX and SRT Return Trips

The government has introduced a set of three tax support measures, including temporarily doubling the income deduction rate for spending at traditional markets, to stimulate consumption during the Chuseok holiday. To promote regional tourism and facilitate citizens' travel to and from their hometowns during the holiday, highway tolls will be waived, and discounts will be offered for return trips on KTX and SRT trains.

On the 28th, the government held an Economic Ministers' Meeting chaired by Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, where it announced the 'Chuseok Livelihood Stabilization Measures' containing these details.

Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Strategy and Finance, is responding to lawmakers' questions at the plenary meeting of the Planning and Finance Committee held at the National Assembly on the 27th. Photo by Kim Hyun-min kimhyun81@

Three Tax Support Measures to Promote Consumption in the Second Half of the Year, Including Gift Tax Exemptions

To expand sales for small business owners through tourism activation, 500,000 accommodation coupons will be distributed targeting non-metropolitan areas during the Chuseok period. Plans are underway to increase international flight routes by more than 25% in the second half of the year, focusing on certain East Asian routes such as China, where demand for inbound tourism is high.

Highway tolls will be waived during the Chuseok holiday, and discounts will be provided for return trips on KTX and SRT trains. Palaces, royal tombs, and historic sites will be opened free of charge, and cultural and experiential events will be held. October 1, the 76th anniversary of the founding of the armed forces, will be designated as a temporary holiday to stimulate consumption.

The government also introduced a set of three tax support measures. First, companies giving Chuseok gifts to employees will receive increased value-added tax (VAT) exemption benefits. Previously, companies were granted a VAT exemption benefit of up to 100,000 KRW per employee annually for gifts given on holidays, birthdays, or company anniversaries. Going forward, 100,000 KRW will be exempted for each occasion?holidays and birthdays/company anniversaries?totaling 200,000 KRW.

If spending in the second half of this year increases by more than 5% compared to the same period last year, the income deduction rate on the increase will be temporarily doubled to 20%. The income deduction rate for spending at traditional markets in the second half of the year will also be raised from 40% to 80%.

From the 2nd of next month for one month, the purchase limit per person for paper Onnuri gift certificates will be increased by 500,000 KRW from 1.5 million KRW to 2 million KRW. The discount rate for card-type or mobile Onnuri gift certificates will also be raised from the current 10% to 15%.

The number of restricted industries for Onnuri gift certificate use will be reduced from 40 to 28, and 300 alley-type shopping districts will be designated by the end of this year. For companies purchasing Onnuri gift certificates for business promotion expenses, a special tax deduction for business promotion expenses will be applied.

Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, attended the Economic Ministers' Meeting held at the Government Seoul Office in Jongno, Seoul on the 21st, speaking about recent economic issues such as the Wemakeprice and Tmon incidents and the fuel tax. Photo by Jo Yong-jun jun21@

Monthly Relay Sales Events Including Donghaeng Festival and Korea Sale Festa

To foster a consumption atmosphere, from September onward, monthly events such as the Donghaeng Festival, autumn regular sales, and Korea Sale Festa will be held consecutively, and regional specialty products will be offered at up to 40% discounts through the Post Office shopping mall.

Performance bonuses for public institutions' management evaluations will be paid early before Chuseok, and government and public institutions will be encouraged to take autumn vacations before and after the holiday. The allowable amount for meals under the 'Act on the Prohibition of Improper Solicitation and Graft' (Improper Solicitation and Graft Act) will be raised from 30,000 KRW to 50,000 KRW, and an increase in the gift value limit for agricultural, livestock, and fishery products will also be considered.

Consumption promotion events will be held through online sales channels of over 530 traditional markets, along with special online exhibitions for small business owners. Free shipping and prize giveaways will be offered for purchases of traditional market products on online shopping malls. To improve convenience for traditional market users, parking will be allowed on surrounding roads during the Chuseok holiday.

Additionally, to promote investment, an additional 1.5 trillion KRW in public investment will be made in the second half of the year, and private investment execution will be expanded by 800 billion KRW compared to the previous year, increasing the annual execution scale to 5.7 trillion KRW, the highest level in five years.

To boost local housing demand, plans are underway to exclude 50% of capital gains tax on properties acquired in non-metropolitan completed unsold housing and rented out for more than five years from taxation for five years. The 'Investment Express' program, designed to support corporate investment, will be expanded and fully launched in the second half of the year, with a third investment activation plan to be announced within the year.

Meanwhile, to ease the financial burden on companies affected by unsettled payments from TMON and WEMAKEPRICE, the government announced it will retroactively lower the emergency management stabilization loan interest rates from the Small Enterprise and Market Service and the Korea SMEs and Startups Agency to 2.5% for already disbursed amounts, and uniformly apply a 0.5% guarantee fee for the Korea Credit Guarantee Fund.

Furthermore, as a follow-up to the 'Dynamic Economy Roadmap' announced in July, the government plans to activate large-scale, long-term rental businesses by specialized corporations to supply more than 100,000 quality private rental housing units by 2035, and to supply 50,000 affordable public rental housing units by 2035 by redeveloping aging public office buildings mainly in urban areas preferred by young people into mixed-use developments.

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