Seoul's 2nd supplementary budget to be around $26 bn to help the needier

[Graphics by Song Ji-yoon]

The South Korean government is packaging a second supplementary budget of around 30 trillion won ($26.4 billion), more than doubled from the first in March, through excess tax revenue to mostly help troubled businesses and lower-income class and finance stimuli for broader population through cash-back on credit card spending.

When asked by a ruling party lawmaker if the new extra budget would be 35 trillion won, given this year’s estimated excess tax revenue of 32 trillion won in a parliamentary hearing on Wednesday, Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki said the package the government is readying for legislative review in early July comes to “slightly over 30 trillion won.”

The ruling party has been pushing for a budget up to 35 trillion won that includes universal handout as in last year.

The government, however, would keep the new budget below that level and broad stimuli to cash-back program

[Photo by Kim Ho-young]

Under the government’s supplementary budget outline, 7 trillion won to 8 trillion won will be set aside to provide relief funds to small business owners that have suffered losses from mitigation actions, 10 trillion won to 12 trillion won to fund bottom 70 percent to 80 percent income group; 2 trillion won to 3 trillion won as cashback reward program to boost spending, 2 trillion won to 3 trillion won to support vaccine purchase development and jobs, and 3 trillion won to 4 trillion won to repay debt and seek job measures.

Businesses hurt by social distancing measures received 5 million won from the first 14.9 trillion won supplementary budget this year. The second supply is expected to be 20 percent higher at 6 million won, according to the government’s plan.

Relief funds are expected to be out in the end of July or early August after the finance ministry submits supplementary budget plan to the National Assembly in July.

Hong also said the government will review the ruling party’s proposal to change the threshold for comprehensive property tax for single homeowners from current 900 million won in appraisal value to top 2 percent expensive homes to reflect them from tax billing in November.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]