The National Tax Service said on the 5th that households will no longer have to pay value-added taxes when using postpartum helper vouchers. The government provides differential support for the expense of postpartum helpers to childbirth households with income at or below 150% of the median, depending on income level. Until now, however, while government subsidies were exempt from value-added taxes, the out-of-pocket portion was taxed.
After a meeting that day with the Korea Postpartum Care Association and the Korea Maternal and Newborn Health Care Association, National Tax Service Commissioner Im Gwang-hyeon said, "We concluded that applying the tax exemption to the full voucher amount is the correct interpretation and have decided to change the previous interpretation."
The National Tax Service changed its previous interpretation after deliberation by the Internal National Tax Statutory Interpretation Review Committee. With this change in tax law interpretation, not only mothers and newborns but also users of social welfare services provided via vouchers, such as older adults and people with disabilities, will no longer bear value-added taxes.
Commissioner Im Gwang-hyeon said, "Going forward, the National Tax Service will continue to closely examine whether there are unreasonable aspects in the enforcement of the tax law and improve the system to reduce tax burdens related to low birthrates so that it helps the livelihoods of the public and the economy."