South Korea considers raising tax refund limit for foreign tourists

This is part of an initiative to promote the Tourism industry.

A notice board providing details on tax refunds in central Seoul, South Korea.

Finance Minister Choo Kyung-ho revealed the plan to reporters before returning home from Marrakesh, Morocco, after attending the annual meetings of the International Monetary Fund (IMF) and the World Bank (WB).

“We are looking at significantly increasing the cap,” Mr Choo said, without specifying the amount, noting only that the new regulation will be implemented next year.

Currently, South Korea offers on-the-spot tax refunds for individual payments of up to 500,000 won ($370) at designated stores, with a maximum cap of 2.5 million won per total purchase.

The latest plan comes after the number of visitors to South Korea dropped to 3.2 million in 2022, from 17.5 million in 2019, as a result of the Covid-19 pandemic.

The finance ministry said the new policy will help South Korea attract more foreign tourists and boost domestic consumption. In 2019, South Korea offered 31.6 billion won in immediate tax refunds to foreign tourists, up 26 percent from 24.9 billion won in 2018.

Meanwhile, the government is trying to attract more Chinese tourists as Beijing decided to lift a ban on group tours to South Korea in August, ending a six-year hiatus due to strained relations following the deployment of a US defense system there.

Source