Korea to increase tax benefits for social service providers

Deputy Prime Minister and Finance Minister Hyun Oh-seok said Wednesday that the government will consider expanding tax benefits and policy financing to small and medium businesses operating in the social services sector.

In an economic-related meeting, Hyun said that the social services sector will contribute to job growth as demand for social services such as child care and nursing for senior citizens is expected to grow.

Korea aims to introduce measures to boost the sector’s value addition by further inviting private corporations as it still lacks productivity.

This is in line with efforts to increase productivity in the general services sector whose output per worker falls well behind that of the manufacturing sector, even though service providers employ more people.

Early this month, the finance minister unveiled plans to increase support to SMEs in the services sector as part of efforts to achieve an employment rate of 70 percent over the next four years.

Its first set of measures for the services sector also included offering tax incentives to companies such as leisure, content, information security and education.

The Ministry of Science, ICT and Future Planning and the Ministry of Culture, Sports and Tourism joined the Finance Ministry to back their respective industries such as information protection services and entertainment content providers.

The Ministry of Health and Welfare will be leading in the policy coordination for the social services sector, and seeks to lower entry barriers to the industry so that it can increase competition and consumer choices.

This will also lessen the government’s spending burden as it seeks to expand welfare financing for the low- and mid-income families.

By Park Hyong-ki (hkp@heraldcorp.com)