Foreign tourists to get tax benefits

President Park Geun-hye smiles while chairing a meeting aimed at attracting more foreign tourists at Cheong Wa Dae, Wednesday. She said she wore a red coat to display her “passion” to draw more foreign tourists. / Yonhap

By Kim Tae-gyu

Foreign visitors to Korea will be reimbursed for value-added tax on hotel charges from next year.

The Ministry of Culture, Sports and Tourism (MCST) reported a set of measures to attract more tourists at a meeting chaired by President Park Geun-hye, Wednesday.

“If foreign visitors pay hotel charges themselves, they will be reimbursed for the 10 percent value-added taxes,” the ministry said.

Canada adopted a similar scheme from 1992 through 2006. During the period, the country chalked up an average of 5.8 percent rise in tourist revenues every year.

However, if domestic travel agencies pay the hotel bills or they resort to other accommodation than hotels, they will not benefit from the tax favors.

The new step is expected to cut down on tax income by 50 billion won per annum but the MCST projects that it will lead to more foreign visitors to have positive economic effects worth an estimated 300 billion won.

After phasing in the unprecedented policy next year by revising the relevant law, the MCST plans to evaluate its precise effects before deciding whether or not extend it beyond 2015.

The MCST will also ease visa rules for China and Southeastern Asian nations as an increasing number of people visit Korea from the populous regions.

Thus far, Korea has rarely issued multiple visas to people from these countries but they will be available to residents of Beijing and Shanghai as well as those who study at certain Chinese universities.

Also included in other steps of promoting tourism income is to allow foreigner-only casinos on cruise ships owned by Korean companies. Toward that end, the MCST will check their financial health.

To draw more foreign cruise liners, the government plans to build more berths dedicated to cruise ships at the country’s major seaports so that the total number will reach seven by 2015 12 by 2020. Currently, there are merely three cruise ship-only berths.

“Tourism is a representative convergence industry that involves many sectors together. It is also a high value-added business that helps create a lot of jobs,” Park said.

“I regard the tourism business as a significant future growth engine for the economy. To further boost our tourism industry, we have many things to improve and prepare for.”