By Choi Sung-jin
Starting next year, foreign tourists buying items priced less than 200,000 won ($173) each at Korean tax refund shops will be able to get their taxes back immediately, officials said Monday.
That means foreign visitors will soon buy relatively cheaper products, including cosmetics, in tax refund shops at prices excluding value-added and excise taxes. Currently, foreigners who use tax refund shops receive their tax money back at ports and airports when they leave this country.
The much faster and more convenient refunding is likely to sharply increase foreigners' use of tax refund shops, whose number totals about 11,000, and intensify their competition with far larger duty-free shops that mainly deal with luxury items and other expensive goods, industry sources said.
Group tourists who visit designated places aboard large buses are mainly using duty-free shops now. Yet foreigners who travel in small groups of five or fewer may find the tax refund shops far more attractive, they said, adding that the new refunding system will particularly benefit smaller shops and tourist attractions far away from large cities.
Japan, which refunded taxes for purchases priced between 5,000 yen to 500,000 yen, from last year, saw the number of "mini tax-free shops" shops jump from 5,000 to 18,000 in a year. Their Korean counterparts will provide the similar service for goods starting with the price tag of 30,000 won and within the aggregate total of 1 million won.