The revenue threshold for dividing small and medium enterprises will be raised to 1.8 billion won from the existing 1.5 billion won for the first time in 10 years. As a result, corporations that were previously excluded from small and medium enterprises due to a simple increase in revenue caused by rising production costs will now be able to receive benefits such as tax reductions and public procurement.
The Ministry of SMEs and Startups announced on the 1st that it has prepared a revision plan for the revenue standards for small and medium enterprises and has finalized it through the Economic Relations Ministers' Meeting.
The 'small and medium enterprises revenue standards' established in 2015 have faced criticism for not reflecting the accumulated price increases over the past 10 years. Corporations that exceeded the small and medium enterprise standards due to simple revenue increases resulting from production cost surges were unable to receive various benefits such as tax reductions, public procurement, and government support programs.
In response, the Ministry of SMEs and Startups formed a task force (TF) in collaboration with academic institutions and experts, including the Korea Development Institute (KDI) and the Korea SMEs & Startups Institute (KOSI), starting in April of last year to prepare a revision plan for the scope of small and medium enterprises.
The government has reflected the unique circumstances faced by the industry in this revision plan. The revenue standards were set with consideration for the specificities of industries such as primary metal manufacturing, which has seen increased burdens due to soaring raw material import costs, and automobile manufacturing, which is expected to face difficulties due to U.S. tariffs.
Under the revised standards, the revenue threshold for small and medium enterprises will be increased to a maximum of 1.8 billion won from 1.5 billion won, and the revenue brackets will expand to seven categories. The upper limits for revenue thresholds by industry will increase by 20 million to 30 million won compared to the current standards.
The revenue standard for small businesses, which is the basis for small business classification, will be increased to a maximum of 140 million won from 120 million won, and the revenue brackets will expand from five to nine categories, with the upper revenue limits by industry increased by 5 million to 20 million won compared to the current standards.
As a result, about 5.73 million corporations that fall under the expanded categories among the total of 8.04 million small and medium enterprises are expected to receive stable benefits such as tax reductions, public procurement, and government support programs.
Oh Youngju, Minister of the Ministry of SMEs and Startups, noted, "Through this revision, small businesses will be able to grow stably, strengthening the growth ladder for corporations," adding, "It will be helpful for small and medium enterprises struggling with issues like export price competitiveness due to U.S. tariff increases and worsening global raw material supply chains."