Give a Gift, Get a Return... Benefits of the 'Gohyang Sarang Donation Program' Revealed

100,000 Won Donation, 100,000 Won Tax Credit + 30,000 Won Gifts
Son Heung-min, J-Hope, Ban Ki-moon and Other Celebrities Participate

[Asia Economy Reporter Yoon Seul-gi] Since the implementation of the Hometown Love Donation System on January 1 this year, a series of donations by famous figures has continued. Soccer player Son Heung-min from Chuncheon, Gangwon Province, BTS member J-Hope from Gwangju, and former UN Secretary-General Ban Ki-moon from Eumseong County, Chungbuk, have all participated in donations.

The Hometown Love Donation System allows individuals to donate to regions other than their registered address, and the local governments receiving the donations collect and use them for residents' welfare. Specifically, it is used for ▲supporting socially vulnerable groups ▲protecting and nurturing youth ▲promoting culture, arts, and health ▲revitalizing local communities ▲and projects to improve residents' welfare.

Since January 1st of this year, the Hometown Love Donation System has been in effect. The Hometown Love Donation System allows individuals to donate to regions other than their registered address, and local governments collect these donations to use for the welfare of residents. Photo by Muan-gun

Donations of up to 100,000 KRW are fully tax-deductible, and 16.5% of the amount exceeding that can be deducted. For example, if you donate 1,000,000 KRW, you will receive a total deduction of 248,500 KRW, which is the sum of 100,000 KRW and 16.5% of the excess 900,000 KRW (148,500 KRW). Individuals can donate up to 5,000,000 KRW annually.

The donation process is simple. You can donate through the online system (Hometown Love e-Eum) without a separate visit, or offline by visiting local governments or designated financial institutions (about 5,900 NongHyup branches).

Thank-you gifts can be purchased with donation points. Donation points are generated according to the rate set by the local government (up to 30%). If you donate 100,000 KRW, you receive a tax deduction of 100,000 KRW plus thank-you gifts worth 30,000 KRW, totaling benefits of 130,000 KRW.

Expectations for Win-Win Effects Between the Capital Region and Local Areas Through the 'Hometown Love Donation System'

This policy was introduced to alleviate the financial gap between the capital region and local areas caused by overpopulation in the capital region, enabling mutual growth. The idea for the system came from Japan's 'Hometown Tax' (Furusato Nozei). In Japan, if you donate 2,000 yen (about 20,000 KRW) or more to your hometown or a desired local government, you receive tax deduction benefits along with thank-you gifts prepared by the local government. Since its inception in 2008 with 8.14 billion yen, donations increased 102 times to 830.2 billion yen in 2021.

Photo by Ministry of the Interior and Safety

A virtuous cycle is also a special feature of the Hometown Love Donation System. Donors can directly choose thank-you gifts, and local governments prepare gifts using regional products. Thank-you gifts include agricultural, fishery, livestock, and forest products produced or manufactured locally, manufactured goods, locally accepted gift certificates, as well as accommodations and tourism services recognized as necessary for local economic revitalization. The government expects this to have a positive effect on regional economic revitalization and national balanced development.

With the Lunar New Year approaching, competition among local governments for thank-you gifts is fierce. Sokcho, Gangwon Province offers yacht tour vouchers, Gyeongnam provides cruiser yacht experience tickets, and Ulsan gives discount coupons for caravan accommodations at Daewangam Park. Gapyeong, Gyeonggi Province offers lodging vouchers for recreational facilities and circular bus tickets, while Michuhol District in Incheon provides baseball game tickets.

Danyang, Chungbuk, plans to issue Cyber Citizen IDs. Donors holding this ID can receive tourist discounts equivalent to those for Danyang residents. In some areas, there are services for grass-cutting on ancestral graves. In Gyeongnam Uiryeong, Gyeonggi Pocheon, Jeonbuk Muju, Jeonnam Goheung and Jangseong, and Gyeongbuk Gyeongju, donors receive grass-cutting proxy services.