MoEF Eases Burden on Housing Finance Credit Guarantee Fund Contributions

by Lee Eunjoo

Published 12 Apr.2023 14:30(KST)

Held the 2nd Contribution Management Deliberation Committee Meeting Chaired by Vice Minister Choi Sang-dae

The government has decided to ease the burden of household debt by relaxing the contribution fees for the Housing Finance Credit Guarantee Fund. Although these contribution fees are not taxes, they refer to mandatory payments required by law in connection with public interest projects.

On the 12th, the Ministry of Economy and Finance held the 2nd Contribution Fee Operation Deliberation Committee meeting chaired by Vice Minister Choi Sang-dae, where three agenda items were reviewed and approved, including adjustments to the contribution fee system for the Housing Finance Credit Guarantee Fund and the Housing Mortgage Retirement Pension Guarantee Account.

The committee decided to expand the maximum preferential rate applied to the contribution rate of the Housing Finance Credit Guarantee Fund for fixed-rate, installment-repayment housing loans that contribute to improving the structure of household debt from 0.06% to 0.10%. Currently, even if the total preferential rate applied when exceeding targets surpasses 0.06%, the maximum limit of 0.06% is applied; after the change, it will be possible to apply up to 0.10%. The Ministry of Economy and Finance explained that “this proposal was made to encourage active handling of fixed-rate, installment-repayment housing loans and to strengthen incentives for enhancing the soundness of household debt.”

Four types of medical devices were also added to the list of medical devices exempt from waste disposal fees, which are currently exempt because they bear disposal costs as medical waste. The four added items are stubs and catheters, respiratory masks, blood filters for artificial kidneys, and blood circuits for artificial kidneys. Accordingly, these four newly added medical devices will be exempt from contribution fees going forward. The Ministry explained that this measure resolves the double burden on companies that must pay waste disposal fees under the Resource Recycling Act despite already bearing separate disposal costs under the Waste Management Act.

Furthermore, starting in 2023, three types of flat-panel LED lighting products will be excluded from the “Producer Responsibility Utilization System,” which imposes contribution fees proportionate to the amount of non-compliance on producers who fail to fulfill recycling obligations. This measure aims to alleviate economic burdens by improving areas that could act as excessive regulations on companies. Vice Minister Choi Sang-dae stated, “As time passes, changes in the economic and social environment may cause parts of the contribution fee system to no longer align with its original purpose, so we will strive to minimize the burden on the public through continuous system improvements.”