Pandemic-hit small business owners to receive additional 3 million won
Finance Minister Hong Nam-ki speaks during a meeting at the government complex in Seoul, Jan. 14. Yonhap
The government plans to propose another extra budget of 14 trillion won ($11.8 billion) to support small merchants suffering from COVID-19 caused losses amid extended social distancing curbs against the coronavirus, the finance minister said Friday
The administration will create the extra budget because last year saw additional tax revenue estimated at well over 10 trillion won, according to Finance Minister Hong Nam-ki.
The planned budget will be first financed with debt sale, as the tax revenue can only be used after the government settles last year's state accounts in April.
It plans to submit the extra budget bill to the National Assembly before the Lunar New Year holiday scheduled for Jan. 31 to Feb. 2.
"The government plans to draw up an extra budget to help small merchants and support antivirus efforts," Hong told a press briefing.
South Korea plans to spend 10 trillion won to additionally provide 3 million won to each merchant who has suffered a fall in revenue.
In December, the government offered 1 million won each in a bid to ease their burden in paying rent and other costs.
The country will also raise the budget set aside for the state compensation scheme to 5.1 trillion won from the current 3.2 trillion won.
Last year, the government launched a state system to compensate merchants for their losses caused by its orders to shut down business because of COVID-19.
President Moon Jae-in ordered his officials Thursday to "swiftly" draw up measures to utilize excess tax revenue to support pandemic-hit merchants and the self-employed.
South Korea logged a larger-than-expected excess tax revenue last year on the back of rises in asset prices and the economic recovery.
The country's yearly excess tax revenue is estimated to reach at least 26.8 trillion won, larger than the finance ministry's November forecast of 19 trillion won.
Hong previously opposed the creation of another extra budget, citing concerns about fiscal soundness.
But the ruling Democratic Party of Korea (DPK) has pressed for the need to draw up a supplementary budget this year.
Ahead of the March presidential election, Lee Jae-myung, the presidential candidate of the DPK, also called for an extra budget of at least 25 trillion won to support affected merchants.
The government drew up two supplementary budgets totaling 50 trillion won last year to provide tailored support to small merchants and cash handouts to people in the bottom 88 percent income bracket. (Yonhap)