[2023 Tax Reform] Junggi Central Association "Welcomes... Opens Path to Fostering Long-Lasting Companies"

The small and medium-sized enterprise (SME) sector has expressed a 'welcoming' stance regarding this year's tax law amendment proposal.

The Korea Federation of SMEs stated in a press release on the 27th, "The SME sector welcomes the government's '2023 Tax Law Amendment Proposal,' which focuses on revitalizing the economy centered on the private sector."

Kim Ki-moon, Chairman of the Korea Federation of Small and Medium Business, is speaking at a meeting with Choo Kyung-ho, Deputy Prime Minister and Minister of Economy and Finance, and small business owners held on the 19th of last month at the Korea Federation of Small and Medium Business in Yeongdeungpo-gu, Seoul.
Photo by Yonhap News

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This tax law amendment proposal includes extensions of the installment payment period for gift tax on business succession, expansion of low-rate gift tax brackets, and relaxation of restrictions on business type changes in line with industrial trend changes. These were suggestions made by the SME sector during a meeting held last month on the 19th between Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho and SME representatives.

The Korea Federation of SMEs explained, "Given the rapid aging of SME CEOs and the reality that 84% of SMEs prefer planned pre-succession, the government's announcement to improve tax support for business succession opens the way for fostering long-lived SMEs through smooth social and economic responsibility and business succession."

Tax special cases for SMEs maintaining employment and income tax reductions for SME employees have also been extended. In this regard, the Federation emphasized, "Amid expected low economic growth, this will greatly help SMEs in job creation and resolving labor shortages."

Furthermore, the Federation requested, "Considering that long-lived SMEs generate high social and economic outcomes in exports, employment, and research and development, we urge the National Assembly to actively support legislation for smooth succession of SMEs. The SME sector will also strive to strengthen our economy's competitiveness through investment and job creation in line with the government's foundation for fostering long-lived SMEs."

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