The Korea Management Innovation Small Business Association (MainBiz) has requested increased tax support for small and medium-sized enterprises (SMEs) to help maintain employment.
On August 11, the SME Ombudsman held a regulatory improvement meeting with MainBiz at the Gwanghwamun Building in Jongno, Seoul. The meeting was attended by Choi Seung-jae, the SME Ombudsman, Kim Myung-jin, president of MainBiz, and other executives and representatives from member companies.
Kwon Jong-soon, a director at MainBiz, stated, "If the benefits are insufficient, companies will ultimately choose to reduce their workforce when management becomes difficult." He proposed increasing the corporate and income tax deduction rates for SMEs that maintain employment to 20% and 30%, respectively, and extending the application period until the end of 2028.
The government currently allows SMEs that adjust wages to maintain employment to deduct a portion of the reduced total wage and the increase in hourly wages from their corporate and income taxes. This program is set to end at the end of this year.
Choi Seung-jae noted, "Given that the government recently announced the 2026 tax reform plan, which includes ending this program, it may not be easy to continue it. However, it is essential to first verify whether the program has achieved its original objectives." He suggested conducting a survey among MainBiz member companies to gather relevant data.
MainBiz also requested an expansion of the support targets for regional SME development funds. Currently, local governments operate SME development funds to support startups, business stability, and region-specific industries, but the criteria for support and preference vary by municipality, leading to instances where MainBiz companies are excluded.
The Ombudsman reported that he has conveyed requests for regulatory improvements to 15 metropolitan governments, including Seoul, and has received positive responses from Incheon and Gyeonggi. He stated that after the 2027 SME development fund operation plans are released by local governments, they will reassess whether management innovation-type SMEs are included in the support targets and whether the conditions for additional points and preferences are adequate.
Choi emphasized, "Even if immediate answers to these issues are challenging, accumulating evidence from the field can reopen discussions. We will continue to collaborate with relevant departments to ensure that the suggestions made today lead to tangible improvements that SMEs can feel."
* This article has been translated by AI.
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