News summary on the way home from work, Subsletter Evening.
the government <2020년 경제정책방향>has announced Although there are many and complicated contents, I have selected only the contents that will be helpful to the low-income households.
Duty-free shop purchase limit disappears
Taking an international flight is exciting in itself. There are moments when I feel good again before I get on a plane. It’s duty-free shopping, and it gives you another pleasure of traveling because you can buy things at a lower price than the market. Currently, the limit of purchases in domestic duty-free shops is 5,000 dollars. It is said that this limit will be abolished from next year. The goal is to divert overseas consumption into domestic consumption. By the way, it is easy to think that all items purchased at duty-free shops are exempt from tax, but that is not the case. There is a limit to the amount of tax-free benefits that you can receive, but if you bring something you bought at a duty-free shop back into Korea, you can get the tax-free benefit up to $600. Today, the standard for the $600 duty-free limit has not been separately announced, so it is assumed that the duty-free limit will remain the same. By the way, when will I be able to fly abroad?
Freeze electricity and gas rates in the first quarter
In order to stabilize prices next year, public charges such as electricity and gas rates will be frozen in the first quarter. Although there is cost pressure, each institution freezes its rates by reducing its own costs. According to the government’s policy, KEPCO announced today (20th) that it will freeze electricity rates for the first quarter. Electricity rates are announced by KEPCO, but are decided through consultations with the Ministry of Strategy and Finance and the Ministry of Trade, Industry and Energy. City gas rates will also be announced soon. The government chose to freeze the utility bill to prevent a sudden increase in inflation, but as fuel costs continue to rise worldwide, the burden of raising the rate is passed on to the next government.
If you spend more than 5% of your credit card, up to KRW 1 million additional income deduction
This is a policy to restore consumption. If you increase your credit card usage by 5% or more next year compared to this year, you will receive an additional income deduction of up to 1 million won. This is because we decided to deduct an additional 10% point from the increased credit card usage. Let’s assume that Mr. A, with a total salary of 70 million won, spent 20 million won this year and 24 million won next year, all with credit cards. When the existing credit card income deduction rules are applied as it is, the amount of credit card deduction for Mr. A next year is 975,000 won. If the new government standard is applied, the deductible amount will be 1275,000 won. An additional deduction rate of 10% points means an additional deduction of 300,000 won for A. If you increase your consumption in a traditional market, the additional deduction rate increases by up to 20 percentage points. If you are interested in this content, please do not just read the press articles and read the government announcements carefully.
Infant allowance: 300,000 won per month, 2 million won for childbirth
There are also policies that ease the burden of childbirth and childcare. We decided to launch the ‘Five Major Packages to Overcome Low Fertility’, which consist of payment of infant allowance, introduction of the first meeting package, activation of parental leave for couples, expansion of public childcare, and expansion of support for multiple children. First, a monthly infant allowance of 300,000 won is paid to infants between the ages of 0 and 1 starting in January of next year. The amount will be raised in stages to 500,000 won by 2025. If you look at the contents of the ‘First Meeting Package’, 2 million won is paid for the ‘First Meeting Pass’ at the time of childbirth, and the pregnancy and childbirth medical expenses voucher increases from 600,000 won to 1 million won. In order to activate parental leave for married couples, if both parents with children under 12 months of age take leave, a maximum of 3 million won will be paid each month. There is a saying that 100 pills are ineffective as a countermeasure to overcome the low birth rate, but those who are eligible for the benefits should take a closer look.
One year of real residence is recognized if the Jeonse price is raised to within 5%
Next year, it will be two years since the 3rd lease law came into force. There are various measures to respond to concerns that the cheonsei rental market may become unstable. First of all, it is a short-term prescription. For a ‘win-win lessor’ who raises the monthly rent contract to within 5% of the previous contract next year and maintains it for two years, it is recognized that one of the real residence requirements (two years) has been fulfilled in order to receive special transfer tax exemption from capital gains tax. did it with The purpose is to prevent the situation where tenants are sent out to meet the real residence requirements. This is applicable to those who own one house per household with a listed price of less than 900 million won, and only contracts made within December 31st of next year are applicable. The government also decided to increase the deduction rate for the monthly rent tax deduction from the maximum of 12% to 15% in order to alleviate the burden on tenants due to the spread of the reverse tax, such as turning the increase in the Jeonse price into monthly rent. If you look at the graphic below, the economic policies that will change next year are well organized.
“This year’s 4.0%, next year’s 3.1% growth forecast”
I think next year’s game will be worse than this year’s. <2022년 경제정책방향>, the government has set its GDP growth rate for this year at 4.0% and next year at 3.1%. Compared to when it was announced at the end of June, the growth forecast for this year was lowered by 0.2 percentage points and the growth forecast for next year was raised by 0.1 percentage points. The government’s growth forecast for next year is 0.1 to 0.3 percentage points higher than that of the Bank of Korea or the private economic and economic research institute.
.
