The South Korean government will exempt taxes and up subsidies to corporate tenants in industrial cities undergoing layoffs and restructuring.
The aid program will target shipyard hosts Geoje city, Tongyeong city, Goseong county, Jinhae-gu in Changwon city, Dong-gu in Ulsan city, and Gunsan city, which has seen the closure of a dock and auto-making factory.
Kim Dong-yeon, deputy prime minister and finance minster in a cabinet meeting on Thursday ordered the inclusion of Gunsan in “industrial crisis” category and also an extension in financial aid for redundant shipyard workers.
Companies and workers in the troubled locations are eligible for tax relieves and state incentives.
[Source: Ministry of Employment and Labor]
All six areas have suffered from layoffs and streamlining at corporate tenants. Geoje city, Tongyeong city, Goseong county, and Dong-gu in Ulsan city have turned lethargic from a prolonged slump in the shipbuilding industry. Jinhae-gu in Changwon city is home to STX Offshore & Shipbuilding Co. that was saved from court protection last month. GM Korea shut down a factory in Gunsan, where a dock of Hyundai Heavy Industries shuttered due to lack of work.
Kim said the government is pulling together a package of aids to ease sufferings in the industrial cities as the regional economy and commercial business hinge largely on the big manufacturers. Under its plan, the financial aid for small businesses in the regions hit by industry-wide restructuring will be expanded by 200 billion won. Any new business in the crisis area will be exempted from corporate and income taxes for five years and granted doubled aid for facility investment.
The government will allocate 250 billion won for funding for the regions in the supplementary budget.
By Yoon Won-sup and Cho Jeehyun
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]