South Korea Takes Steps to Ease Financial Strain of Soaring PC and Internet Costs

In a bid to alleviate the financial burden on households and small businesses, the South Korean government has introduced a comprehensive package of measures to bring down prices for PCs and internet services. The move comes as rising inflation and global supply chain pressures have pushed monthly internet bills and computer prices to their highest levels in over a decade. For many families, the cost of a new PC now rivals that of a mid-range smartphone, while fixed broadband and mobile data plans have climbed steadily since 2023.

The new policies aim to make digital access more affordable, especially for low-income households and students who rely on computers for education and remote work. At the heart of the government's plan is a targeted subsidy program that will cover up to 50% of the cost of a new PC for eligible families. The program is expected to benefit around 1.2 million households, with priority given to households with children in school and those receiving national basic livelihood support. Eligibility will be determined through a simplified online application process, and the subsidies are set to begin rolling out in June 2026.

In addition to the subsidy program, the government will partner with major retailers to offer discounted refurbished PCs, providing a lower-cost alternative for families who don't need the latest hardware. These refurbished units will come with warranties and basic tech support, ensuring reliability for users who might otherwise avoid second-hand devices due to quality concerns.

Reducing Internet Costs

Another key component of the initiative is a temporary reduction in the Value-Added Tax (VAT) on internet services. Starting in May 2026, the VAT on fixed broadband and mobile data plans will drop from 10% to 5% for a period of 12 months. The government estimates this will save the average household about 3,000 to 5,000 South Korean won per month, around $2.20 to $3.70 at current exchange rates. While the savings may seem small on paper, advocates point out that for low-income families, even minor reductions in recurring expenses can make a meaningful difference over time.

Telecom providers have agreed to pass the full benefit to consumers, avoiding any loopholes that might dilute the impact. The policy also includes a cap on price hikes for internet plans during the 12-month window, preventing sudden spikes that could negate the tax cut.

Support for Small Businesses

Small businesses, particularly those in rural areas and digital startups, have also been prioritized in the new measures. A separate grant program will cover up to 30% of the cost of upgrading office PCs and internet infrastructure for small businesses with fewer than 50 employees. The grants are capped at 3 million won per business, and funds can be used for either new hardware or improved network equipment. The government has allocated 50 billion won (approximately $37 million) to this initiative, with applications opening in July 2026.

Officials hope this will help close the digital divide between urban and rural enterprises, where internet speeds and reliability often lag behind those in cities. Early feedback from business groups has been cautiously optimistic, though some critics argue the grant amounts may not be sufficient for businesses with more complex IT needs.

Beyond subsidies and tax cuts, the government is also investing in long-term solutions to curb rising costs. By addressing the financial strain of soaring PC and internet costs, the government aims to make digital access more affordable and inclusive for all South Koreans.