Duty-free on arrival set for Incheon next year

The country’s first duty-free store available to returning travelers will open at Incheon International Airport as early as next May, the Finance Ministry announced Thursday.

Currently, duty-free purchases are allowed only for passengers departing Korea, either at an international airport or in advance at city locations with the goods available for pick-up at the departure terminal.

“The number of people traveling abroad has been on the rise and they’ve been grappling with the inconvenience of carrying products purchased duty-free throughout the whole trip,” the Ministry of Economy and Finance said in a statement released Thursday.

“[Duty-free on arrival] is aimed to end that inconvenience and prompt consumers to spend more inside the country instead of shopping duty-free overseas.”

The statement added that duty-free on arrival is now already available at 149 airports in 73 countries.

Cigarettes, a duty-free steady seller, will not be allowed for sale at on-arrival stores, the ministry said.

“The price of cigarettes differs greatly at duty-frees and local retailers,” said a source at the Finance Ministry. “People could buy lots of them at arrival gates and resell them in Korea at a price cheaper than the official retail price.”

The same abuse could be possible with cigarettes purchased at departure duty-frees, but the source added that “generally speaking, it’s inconvenient [to buy cigarettes there for resale] because they have to be carried throughout the trip and, in such cases, the purpose is mainly personal, either for the consumers themselves to smoke during the trip or as gifts.”

Fruits and meat products that must be declared for quarantine are also banned from arrival duty-free stores.

The Finance Ministry also reminded travelers that the purchase limit for duty-free products for Koreans returning home remains unchanged at $600.

Larger duty-free brands that operate stores in the city and departure gates argued the need to raise that limit if the government wanted to grant licenses for stores at the airport’s opposite end.

Bidding for licenses to run duty-free spaces at Incheon International Airport’s arrival gates will be held between March and May of next year.

Only small and mid-sized companies are allowed to submit business plans, leaving out industry leaders such as Lotte, Shilla and Shinsegae Duty Free.

Operations at on-arrival duty-free stores are planned to start between late May and June. After a six-month trial run at Incheon, the government will look into expanding duty-free on arrival at other international airports in the country.

Thursday’s announcement puts an end to a 15-year debate. Consumers support the idea: 81 percent of respondents to a government survey last month complained about carrying duty-free goods while traveling.

Since 2003, lawmakers have proposed to begin duty-free on arrival six times, but all the initiatives failed in the face of opposition from current operators and airlines. Current tax law allows duty-free purchases only on departure, so National Assembly action would be required as part of setting up a new system.

President Moon Jae-in urged quick changes to the current system in August, citing a $13.7 billion tourism deficit last year.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]