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As Chuseok approaches, government opens up its wallet

Aug 28,2019
The government will offer over 100 trillion won ($82.4 billion) to businesses and households as part of its annual financial support package ahead of the Chuseok holiday.

The Ministry of Economy and Finance said Tuesday it has earmarked 96 trillion won to support small- and medium-sized businesses, a 10 trillion won rise from a similar support package offered a year earlier. The budget includes 37 trillion won in new loans by state-run banks and 56 trillion won in loan extensions.

The support plan for Korea’s harvest festival, which falls in mid-September, also includes 5 trillion won in support to 4.7 million low-income households.

The government said it would provide its planned earned income tax credit and child tax credit to households by Sept. 10. Low-income households will receive up to 3 million won in earned income tax credits. The ministry explained that the tax credit will be given to households that earn up to 36 million won per year and have less than 200 million won in assets.

A child tax credit of up to 700,000 won will be offered to households that earn less than 40 million won.

The tax credit will be provided earlier than the originally planned schedule of late September. This year’s tax credit support is a rise from last year when 1.8 trillion won was offered to 2.7 million households.

The announcement also includes spending to relieve the travel rush during the holiday season, which sees millions of Koreans travel around the country to visit their families.

The plan will waive highway toll fees and provide up to 40 percent discounts on high-speed rail travel from Sept. 12 to 14. Parking lots at public institutions will also be opened for free during the holidays.

The government will also strengthen emergency responses to road accidents during the period. According to the Finance Ministry, there were an average of 2,181 accidents and 35 deaths per year from 2016 to 2018.

The government also hopes to encourage local tourism during the holidays by holding sale events for regional goods until Oct. 20. The government plans to sell around 1.1 trillion won worth of coupons for the sale events this month and in September.

“Considering difficult economic conditions, the Chuseok support plan was made in order to […] stabilize and stimulate the public’s livelihood,” said the Finance Ministry in a statement.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]