The Korea Federation of Micro Enterprise (KFME) proposed to the government measures to ease tax burdens on microbusiness owners, improve cash-flow liquidity, and stimulate consumption.
On the 7th, Song Chi-young, president of the Korea Federation of Micro Enterprise (KFME), held a roundtable at the KFME Digital Education Center in Mapo-gu, Seoul, with Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance nominee Lee Hyeong-il (currently first vice minister at the ministry) to convey on-the-ground difficulties facing microbusiness owners and related policy tasks.
Song said, "In July, the microbusiness owners' business sentiment index fell to 55.6 points, and the average liability exceeded 170 million won," adding, "Rolling over debt with more debt has become routine."
That day, the Korea Federation of Micro Enterprise (KFME) proposed three key tasks to the government. First, to ease tax burdens, it asked to maintain the preferential deduction rate for value-added taxes applied to credit card sales and the 10 million won cap, and to raise the simplified taxation threshold, which has been frozen since 2020, up to 200 million won by reflecting inflation. It also raised the need for tax administration support, such as lowering the value-added ratio for major industries.
It also called for system improvements to enhance liquidity. Citing delays in settlements by delivery apps and platforms, it proposed fixing the issue where taxes must be paid before receiving actual payments, so that accounts receivable would incur value-added taxes at the time of actual cash inflow. It also requested waiving the national tax card payment fee (0.4%).
It proposed measures to boost consumption and build a social safety net. It asked to extend the current 40% income tax deduction applied to traditional markets to general microbusiness establishments to spur neighborhood commerce, and to consider introducing a "minimum income guarantee system" for microbusiness owners facing livelihood crises due to closure or management difficulties.
Song said, "If neighborhood commerce collapses, it will be hard to expect a healthy recovery of the national economy," adding, "Practical policies must be prepared so microbusiness owners can regain hope and focus on their livelihoods."
In response, nominee Lee Hyeong-il said, "To ease polarization, it is important to support the management stability and growth of microbusiness owners," adding, "We will continue policy efforts so that the warmth of growth reaches all microbusiness owners."