South Korea plans to cut the value-added tax credit on credit card sales for individual business owners from next year, reducing both the credit rate and the annual cap for businesses with annual revenue of 1 billion won or less. The Ministry of Economy and Finance will lower the credit rate to 1.2% from 1.3% and halve the annual limit to 5 million won from 10 million won, a change estimated to affect about 300,000 self-employed people and reduce their tax benefits by as much as 750 billion won. That implies an average tax burden increase of 2.5 million won per person. The new cap is reached at roughly 416.7 million won in annual revenue, down from about 769.2 million won under the current system, sharply widening the impact on businesses in the roughly 420 million won to 1 billion won revenue range. Officials say most small business owners with annual revenue of 400 million won or less will see little change, but industry groups argue the lower credit rate will still trim benefits below that level and that the burden rises quickly once revenue passes 400 million won. Restaurants and convenience stores are seen as particularly exposed, while Bank of Korea data show worsening closures, rising loan delinquencies and sustained borrowing costs among self-employed workers in wholesale, retail, accommodation and food services.