Implemented from 2023... Up to 5 Million KRW per Person Annually
Expected to Address Regional Issues Such as Financial Deterioration and Population Outflow
[Asia Economy Reporter Lim Cheol-young] The bill on the "Hometown Love Donation Act," which utilizes residents' donations for regional development, passed the National Assembly plenary session on the 28th. The Hometown Love Donation Act is a system where residents can donate to local governments of their hometowns or other municipalities different from their registered addresses, and the local governments provide tax credit benefits along with local specialty products as return gifts.
According to the newly enacted law to be implemented from 2023, donors can contribute to local governments other than the one governing their registered address. To avoid burdening local residents, donations to the local government of the donor's registered address are prohibited, and the donation amount is limited to up to 5 million KRW annually.
To foster a healthy donation culture toward one's hometown, coercion of donations is prohibited, and fundraising methods are strictly regulated. Individuals with work or employment relationships are not allowed to donate or raise funds, and fundraising methods are permitted only within a defined scope through advertising media. Private fundraising methods are prohibited, and corporations are also barred from donating to prevent forced solicitations.
Donors may receive return gifts such as goods produced or manufactured within the local government's jurisdiction, securities circulating within the jurisdiction, and other items designated by ordinances as contributing to regional economic revitalization. By focusing on products produced within the jurisdiction for return gifts, the system is expected to create new markets and sales channels for local specialties and play a key role in revitalizing the regional economy.
The Ministry of the Interior and Safety plans to establish measures to prevent side effects related to the management and operation of donations and ensure that local governments use the donations transparently and efficiently. In particular, the use of donation funds will be managed transparently by establishing separate funds for each local government, to be used for projects that promote residents' welfare such as welfare, culture, medical care, and activation of local communities.
Going forward, the Ministry of the Interior and Safety will enact enforcement ordinances in line with the Hometown Love Donation Act and support local governments in preparing fund review committees and enacting ordinances for selecting return gifts necessary for operating funds sourced from hometown love donations.
Minister Jeon Hae-cheol stated, “The Hometown Love Donation system is designed to create a virtuous cycle where affection for one's hometown leads to donations, and return gifts help revitalize the local economy.” He added, “Since the system is expected to have a significant financial supplementation effect for local governments struggling with population outflow, we will make every effort to prepare for its stable establishment.”
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