Suggestions on Tax Support for Small Business Owners
Asian Tax Journal Vol. 21 No. 1 (2020), pp. 89-107
Abstract
The purpose of this paper is to clarify the scope and definition of small business owners, identify the problems of the tax support system for small business owners, and propose improvement measures for tax support. Small business owners provide community members with work opportunities and contribute to boosting consumption by increasing the average income. Small business owners are relatively more affected by the external environment and economic conditions. National support is needed because it is difficult to be competitive and self－sustaining compared to small and medium－sized enterprises and large corporations. Support for small business owners is very helpful, but direct tax support is also urgently needed in the course of their management activities. The methodology of this study identifies the tax support system for small business owners by dividing it into the Value Added Tax Act, the Tax Specialty Restriction Act, and the Income Tax Act. Also we add the supporting system outline and investigate the problems of the small business tax support system. Then, we suggest different tax supports related to small business owners. First, the definition of a small merchant should be stipulated in the tax law in a cursory manner. Second, it emphasizes the need to consider practical details by adjusting the value added rate of the simplified taxation system by industry. Third, exceptions should be established for industries subject to simplified taxation under the Value Added Tax Act. Fourth, the Act on Restrictions on Special Taxes should revise the regulations on tax support for start－up small and medium enterprises. Fifth, Small business owners shoud be applied a 20 percent reduction rate without a regional classification and an industry classification.
Keywords
- Small business owner
- Value－added tax simplified taxation
- The special tax treatment control law
- Tax support system
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