Commissions paid by duty-free stores to be staggered

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Commissions paid by duty-free stores to be staggered

The Ministry of Strategy and Finance announced Friday it will raise the commission it charges duty-free shops by as much as 20 times starting next year.

The current law charges a commission of 0.05 percent of revenues on all duty free shop operators.

Next year, the government will apply different commission rates depending on the size of the store’s revenues.

Stores that generate less than 200 billion won ($171.5 million) a year will pay 0.1 percent of revenues while those that generate more than 200 billion won and less than 1 trillion won will pay a 0.5 percent commission.

Stores with yearly revenue surpassing 1 trillion won will pay 1 percent commission, which is 20 times the current rate.

“We differentiated the commission rate in order to decrease the economic burden for newcomers,” said the ministry official.

But tax-exempt shops operated by small- and mid-sized companies will have their 0.01 percent commission unchanged.

The revised rates will increase commission revenues from 4.3 billion won last year to 39.4 billion won next year. The government said it will use 50 percent of the collected fees to support the tourism industry.

“We expect revenue generated from duty-free shops, which are core elements of our tourism infrastructure, to be given back or re-invested in the overall tourism industry,” said the finance ministry official.

The extension of license periods from the current five years to 10 years has been put off.

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