The Ministry of the Interior and Safety announced that the enactment of the Enforcement Decree of the Hometown Love Donation Act to expand dwindling local finances and revitalize the local economy was approved at the Cabinet meeting on September 7 and will come into effect on January 1, 2023.
The enforcement ordinance enacted this time is a matter delegated by the Act on Hometown Love Donations, detailed standards restricting the collection and reception of Hometown Love Donations, specific methods and procedures for raising and receiving Hometown Love Donations, and people who have donated Hometown Love Donations. We have established regulations regarding details regarding the selection and provision of return gifts provided to people.
Due to the concentration of people leaving the countryside and moving to the metropolitan area and downtown, local governments are experiencing many difficulties because there are no people in the provinces to pay taxes.
If you are simply asked to make a donation, it will be difficult to get a great response, but it is expected that there will be a positive response because a full tax deduction is provided up to the basic amount of 100,000 won, and you can receive a gift in return worth 30% of the donation amount.
You can donate to a region other than where you live and receive a tax deduction on the donation.
Taxes have to be paid anyway! By donating, you can get a tax deduction and receive a gift in return, which is actually beneficial.
Hometown Love Donation System Tax Deduction Benefits Gift Items by Local Government @Elf Cong
Although taxes from the National Tax Service (central government) will be reduced, this is being implemented to help local governments that are experiencing economic difficulties.
This is a system to reduce the financial gap between regions by expanding local finances through voluntary donations from individuals, and to help revitalize the local economy by providing local specialties as gifts.
This system is modeled after the hometown tax system enacted in Japan in 2008. In Japan, donations increased from KRW 86.5 billion in the first year of implementation to KRW 7.1486 trillion in 2020, a whopping 84-fold increase in just 10 years.
However, unlike Japan, Korea has restrictions such as the maximum donation amount and reduced tax credit rate. This is because cities that collect relatively large amounts of taxes actually see their tax revenues decrease.
In Japan, the maximum amount of donations increases depending on the number of household members, single income, dual income, total income, etc. However, in Korea, the maximum amount of donations is limited to 5 million won, and the tax amount is limited to 16.5% for amounts exceeding 100,000 won. You may be eligible for a deduction.
Hometown Love Donation System Benefits and Limits @ELFKONG
However, the same gift amount of 30% of the donation amount is applied.
The reason such a good system is not well known is because there are restrictions on promotion due to the Hometown Love Donation Act.
The use of electronic transmission media (such as text messages and SNS), which are active promotional methods, and door-to-door visits were prohibited, and solicitation and encouragement of donations at private gatherings such as neighborhood associations and alumni associations was also prohibited.
It may be uncomfortable to hear about this topic through unsolicited text messages, face-to-face visits, or private gatherings such as class reunions.
Therefore, I think you can maximize efficiency by looking for gifts and benefits in person for these donations.
Currently, local governments are being asked to register gift items by the end of the year ahead of implementation next year.
There are still some places that are recruiting return gift companies or are in the process of selecting return gifts.
Hometown Love Donation Festival return gift
Below is information on return gifts from some regions. (The order is random.)
– Namwon-si, Jeollabuk-do
Chunhyang Lover’s Chammi, Chueotang, Paprika, Black Pork Set, Traditional Bugak, Wooden Crafts, Namwon Yechon Sukbang Ticket, etc.
– Jeungpyeong-gun, Chungcheongbuk-do
Fresh ginseng, pork, mixed grains, traditional brushes, Gyubang crafts, processed red ginseng products, Jeungpyeong Pass (tour package), Jeungpyeong Eutteum Love Gift Certificate, etc.
-Donghae City
Rice, seafood set, octopus, muktae, traditional liquor, honey, apple juice, aronia juice, deodeok essence, natural soap, etc.
– Samcheok City
Agricultural products (fruits, vegetables, oil, rice), livestock products (honey, Korean beef), marine products (dried fish, seaweed, kelp), forest products (dried vegetables), processed products (sauce, traditional wine, fruit syrup (jam) and juice, broth packs , beef jerky, tea (powder, pill), rice cake, snacks, local gift certificates, etc.
-Sejong City
Agricultural products (rice, peaches, etc.), processed products (sauce, traditional Korean snacks, wine, etc.), tourism experience and cultural products, local currency, etc.
-Goesan-gun
Goesan-gun provides points to ‘Goesan Market’, an online shopping mall that sells local agricultural specialties, which it runs directly, and allows people to directly purchase various items such as various agricultural specialties and processed foods with these points.
-Hwacheon-gun
32 types of agricultural specialties and 16 types of gift certificates
– Chung-cheong bukdo
Agricultural specialty product site Cheongpung Myeongwol Market coupon, Cheongpung Myeongwol Korean beef, Chungbuk cosmetics joint brand, etc.
In addition, products from representative brands, representative agricultural products from cities and counties, tickets to use public facilities, etc.
– Hongseong-gun
Korean beef, Korean pork, seasoned seaweed, salted shrimp, rice, package of agricultural specialties, traditional paste (including fermented foods), fats and oils (sesame oil, perilla oil, etc.), Hongseong Sarang gift certificate, Hongseong garlic, meal kit, organic products, fruits and jams, traditional liquor, tea (liquid tea, traditional tea), etc.
– Uiryeong-gun
Rice, Korean beef, Manggae rice cake, Beolcho voucher, homemade yogurt, etc.
– Ulju-gun
Rice, honey, seaweed, squid (dried, semi-dried), flounder (dried, semi-dried), octopus (boiled), whelk (boiled) agricultural and livestock products, processed red snow crab, sauces (soy sauce, soybean paste), Uljin Love Card, etc.
– Yeongdeok-gun
Snow crab, bunch, peach, etc.
– Jinan-gun
Agricultural products (cereals, fresh ginseng, sweet potatoes, apples, melons, tomatoes, watermelons, dried peppers, dried mushrooms, dried vegetables), livestock products (pork, beef), processed agricultural and livestock products (red ginseng, kimchi, alcohol, black pork cutlet, sauces) , apple juice, tomato juice, thistle juice, slugs, perilla oil set, goat essence), experience tickets (Jinan Red Ginseng Spa gift certificate, horseback riding experience certificate), etc.
– Most local governments, including Gumi-si, Yeongju-si, Iksan-si, Namhae-gun, Jindo-gun, and Cheorwon-gun, have decided on products and are in the process of selecting return gifts and companies.
With only about a month left until implementation, local governments appear to be busy, but the situation is not widely known to citizens, who are the subjects of donations.
In the case of Japan, it is said that competition is fierce, attracting attention with unique products such as beolcho agency tickets, airplane charters, and scallop swimsuits.
In the case of Korea, it seems that the main starting point is decent agricultural, livestock, livestock, and forestry products.
Even in Korea, when unique products are released for competitiveness, they will be promoted in the news, so it will be fun to look back after some time.
As it is not yet implemented, only the items are known, and it was disappointing that detailed information such as how much was donated, what product, and weight was not available.
In conclusion
The purpose is good, and it is quite positive because it helps revitalize the area and you can save a bit on living expenses by receiving a gift in return.
However, since it has not yet been implemented, it is unknown what pros and cons and problems will arise, so I think we need to learn a little more.
Some are concerned about decreasing tax revenues in the city center and mismanagement of funds by local governments.
Currently, a related law has been proposed to support only local governments with a high risk of extinction, and if passed, opposition from several local governments is expected, and it is expected that it will take quite some time until the policy is established.
As implementation progresses and reviews and news about gift items come out in the future, we will organize them one more time.