- The government is considering raising the threshold for simplified value-added tax (VAT) from 80 million won to 100 million won to alleviate the tax burden on self-employed individuals and small business owners.
- The government can adjust the threshold up to 140 million won through an enforcement decree.
- The government plans to raise the threshold to 100 million won before the scheduled tax law revision in July.
- This revision is the first in four years since the threshold was raised from 48 million won to 80 million won in 2020 to alleviate the tax burden on small business owners during the COVID-19 pandemic.
- The consumer price index has increased by 11.6% in the past three years.
- The government is expected to consider factors such as high inflation, high interest rates, domestic economic downturn, and difficulties faced by small business owners in addition to the consumer price increase when determining the new threshold.
- The increase in the threshold is expected to have income support effects for low
- and middle-income self-employed individuals.
- The revision is predicted to result in a decrease in tax revenue of 1.1 trillion won from 2021 to 2025, with an average annual decrease of 224.5 billion won.
- The academic community has found that the expansion of the simplified tax range has provided income support effects for low
- and middle-income self-employed individuals affected by the COVID-19 pandemic.
Source: m.webzine.kacpta.or.kr
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
