The government has concluded a years-long controversy over the feasibility of setting up duty-free shops near airports’ arrival gates and terminals.
In a meeting with other economic policymakers in Seoul on Wednesday, Deputy Prime Minister and Finance Minister Hyun Oh-seok said a policy revision for duty-free shops at arrival zones would only increase congestion and unfairness in taxation between the rich and poor.
Simply put, the cost of disadvantages would outweigh the cost of benefits to the people and small- and medium- sized enterprises should it allow duty-free shops to be opened at airports’ arrival gates under a presidential decree.
Such stores would create “side effects” as they will not only increase congestion but also decrease the efficiency of custom systems at arrival terminals, the Ministry of Strategy and Finance said in a statement.
Also, those who cannot afford to travel abroad like the top income earners would have to pay taxes for goods purchased at home, further increasing inequality between the haves and have-nots.
The only benefit it seemed at the moment would be making outbound Korean travelers carry less bags if the government and the National Assembly favored duty-free shops at arrival terminals.
The issue has been contentious since the early 2000s, with proponents led by the Ministry of Land, Infrastructure and Transport arguing that such shops would increase inbound travelers to Korea and further advance the status of Korea’s airport hub, Incheon International Airport.
They could also help lessen the country’s services account deficit by attracting more visitors to Korea through such duty-free stores.
However, opponents such as the Ministry of Finance argued that it would only widen the gap between the rich and poor with the latter mostly having to pay for fair taxes, and it could further increase the country’s revenue shortfall.
The former administration submitted a revised bill to the National Assembly last year.
It included giving full authority to the Korea Customs Service chief to have final say on which goods can be sold at stores near airports’ arrival terminals, while the location of the shops could only be decided under a presidential decree.
Hyun also urged his economic-related ministers to follow through on implementing policies such as housing revitalization and regulatory reforms as part of efforts to revive private investment and the economy so that the mid and low-income families can see the effects in the second half of this year.
