DUTY-FREE CAP TO BE RAISED

[Anchor Lead]

The Korean government is pushing to raise the duty-free cap on goods brought in by travelers to the country from the current 600 dollars to 800. Also, a plan is underway to exempt taxation on foreign investments in Korean government bonds.

[Pkg]

Duty free shops at Incheon International Airport. Several travelers are seen carrying shopping bags.

[Soundbite] Lee Seok-woo(Seoul Resident) : "I get anxious about whether my purchases would exceed the duty free limit."

The current duty free allowance on a traveler's personal effects has been 600 dollars for the past eight years. The government plans to raise the cap to 800 dollars. The plan is seen as part of efforts to to help the tourism industry hit hard by the pandemic. Korea's increased per capita income was also factored in. The government explains that Korea's nominal gross national income per capita increased by about 30% since 2014, when the duty free cap was set at 600 dollars. The push to raise the cap is good news for related industries as it follows the removal of the purchase limit at duty free shops in March.

[Soundbite] Kim Jun-seong(Lotte Duty Free) : "Our sales more than halved compared to the pre-pandemic level. So, a rise in the duty free cap is likely to rejuvenate the duty free business."

Meanwhile, there are also plans to exempt taxes on interest and capital gains from foreign investment. The government expects the move will boost foreign investment, which would subsequently lower the government bond interest rate and currency exchange rates and ultimately stabilize the government bond and foreign exchange markets. The revision of the tax bills are to be announced on Thursday.