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Hong Jong-hak, who calls "tax free store", reaches this time large companies



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Entry 2018.11.07 03:15

Government, controversy over the promotion of cooperation … Business circles "firm shackles linked to an ankle"
"If the benefits are reduced, the expense is reduced and the investment and creation of jobs is done with the money"

The system of sharing of cooperative benefits led by the government, called system of exchange of yield, already has been implemented by some great corporations like POSCO and Samsung Electronics. In the past, during the administration of Lee Myung Bak, the government promoted the implementation of full benefits under the name of excess profit system. However, large and medium-sized companies share their results autonomously in response to the strong opposition of large corporations. In September this year, 6360 SMEs benefited.

The problem is for the government to legislate. The government is saying: "It's just a way to give incentives to the participation of large corporations." But corporations are responding to the saying: "If the law came into force, it will become mandatory." An official from an economic organization said: "The government is saying that the benefits of sharing profits with small and medium-sized businesses are limited due to the introduction of a cooperative system to share benefits.

◇ "Provide incentives to introduced companies" vs. "Shackles with corporate ankles"

The government announced on June 6 that "cooperative companies", distribution and IT (information technology) large corporations that share profits through research and development (R & D) "Margin compensation type" that provides additional benefits and "Type of incentive" that provides incentives to associated companies that have made efforts to achieve commercial performance. If a large company and a small company jointly develop a new product or manage to locate it, it distributes a certain amount of benefits to a small company according to the volume of sales or the benefit of the product.

Hong Jong Hak (right), Minister of Small and Medium Enterprises, who attended a meeting of the Small and Medium Business Association of Industrial and Commercial Resources held at the National Assembly on June 6, is waiting for a response order. The Ministry of Finance and Economy has announced the plan to introduce a cooperative system for the distribution of benefits for large and medium enterprises together with the Democratic Party and the ruling party. The ruling party plans to address the bill in the ordinary session of the National Assembly and will enter the first half of next year.
Hong Jong Hak (right), Minister of Small and Medium Enterprises, who attended a meeting of the Small and Medium Business Association of Industrial and Commercial Resources held at the National Assembly on June 6, is waiting for a response order. The Ministry of Finance and Economy has announced the plan to introduce a cooperative system for the distribution of benefits for large and medium enterprises together with the Democratic Party and the ruling party. The ruling party plans to address the bill in the ordinary session of the National Assembly and will enter the first half of next year. / News from Yonhap

To encourage the voluntary participation of large corporations, the government has decided to provide all participating companies with a corporation tax credit, the valuation of the joint growth rates and the preferential R & D benefits of the government. In addition, excellent companies are preferred when they take funds from the Korean Development Bank, Export-Import Bank, etc., and the best companies will benefit from the selection of exemplary taxpayers and government awards. Although large companies do not participate, they will not be disadvantaged.

However, companies worry that there is a growing stagnation in the business and that a cooperative benefit-sharing company can turn into shackles that join the ankle of the company. A large company official said: "Currently, major industries, except for semiconductors, are rapidly losing their competitiveness and economic prospects for next year are very uncertain." In this situation I doubt if it is appropriate to implement another network policy for large companies. "In fact, some companies that can implement the shared benefit system with SMEs are Samsung SDI, SK Hynix, POSCO and LG Chem, who are already implementing performance exchange programs. Hyundai Motor, which was the main economy of Korea with Samsung Electronics saw the fall of OP margins to 1.2% in the last three quarters and the OP margin of Kia Motors is only 0.8%.

◇ "Corporations, interference damages may be abroad"

In the business world, the question "Is the government correct knowing the corporation's profit structure?" An official from a large company that requested anonymity said: "The benefits are determined by various factors such as quality and cost, as well as marketing and brand." How can the benefits be determined beforehand,.

It is shown that the government may intervene excessively in the management of the company during the implementation of the cooperative system of participation in the benefit. "It is doubtful how many companies will not comply with the government's policy in the situation that prosecutors, the National Fiscal Service and the FTC are investigating from time to time." The government's evaluation of the implementation of the cooperative benefit, I will have another handle. "Choi Jun-sun, an emeritus professor at the School of Law of the University of Sungkyunkwan, said:" There will be more and more large companies that move abroad and transfer their suppliers to China and Japan. "

Small businesses are also cautious. "It is expected that sharing of cooperation benefits eliminates the polarization between large and small businesses and will be a step to raise the competitiveness of our economy to a higher level." He added: "It is better to introduce self. It should be extended in the direction of strengthening the incentive for large corporations."

☞ Cooperative system for sharing benefits

It is a performance allocation system that divides part of the benefits according to the preliminary agreement when the large corporation and the partners of small and medium-sized businesses reach the target sales or profit targeted in advance. The government plans to offer incentives such as tax incentives to adoptive companies through the legalization of this system for the first time in the world.

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