The government's proposed '2025 tax reform plan' has received voices of concern from the small and medium-sized enterprise sector, which said it agrees with the general direction.
KBIZ noted in a statement, "The extension of the sunset provision for the Special Tax Reduction for Small Enterprises and the easing of requirements for applying income tax upon termination of the Yellow Umbrella Retirement Savings Plan are expected to provide practical assistance to small and medium-sized enterprises and small business owners, who are facing increased economic difficulties."
It also added, "The establishment of a national strategic technology for artificial intelligence (AI) and the introduction of accelerated depreciation benefits for asset investments in smart factories are expected to effectively enhance the innovation of small and medium-sized enterprises."
Concerns were raised about the 1% increase in the corporate tax rate. KBIZ explained, "Last year, the number of business closures exceeded 1 million, and the number of small and medium-sized corporations that reported net losses reached 400,000," adding, "In such an environment, the increase in tax burden is likely to lead to psychological discouragement among businesspeople, resulting in reduced investment and hiring."
It further stated, "During discussions on the corporate tax rate, maintaining the current tax rate for brackets below a certain taxable amount should be considered," and emphasized, "It is necessary to expand tax benefits, such as raising the investment credit rate for safety facilities, so that small and medium-sized enterprises with poor financial conditions can also participate in disaster prevention."