Non-Member Golf Course Acquisition Tax 12,000 KRW Per Person
62 Out of 98 Locations Likely to Become Public Courses
Concerns Over Green Fee Increases at Non-Member Golf Courses
Director Choi Bo-geun's briefing on the revision of the Physical Education Act [Photo by Ministry of Culture, Sports and Tourism]
The government’s decision to impose an individual consumption tax (ICT) on non-membership golf courses has drawn attention to the potential impact of the policy. While some predict that green fees will ease as many golf courses switch to public-type courses to enjoy tax benefits, others worry that non-membership golf courses will pass the tax burden onto golfers by raising green fees accordingly.
On the 18th, the Ministry of Economy and Finance announced through a follow-up enforcement decree on tax reform that starting in July, a 12,000 KRW individual consumption tax will be levied per person at non-membership golf courses. Adding education tax, special rural tax (7,200 KRW), and value-added tax (1,920 KRW), the total tax burden for golf courses will increase to 21,120 KRW.
As the tax burden on non-membership golf courses rises, the industry expects many golf courses to choose the 'public-type' model. The Korea Leisure Industry Research Institute predicted that among 98 golf courses with weekend green fees exceeding the public-type green fee cap (247,000 KRW), 62 courses?excluding 36 with significantly higher green fees?will lower their green fees by 20,000 to 30,000 KRW and opt for the public-type designation. Among the golf courses exceeding the public-type green fee cap, 36 have green fees over 280,000 KRW (public-type cap + 33,000 KRW). The institute speculates these will likely maintain their non-membership status while charging high green fees. According to this, the number of non-membership golf courses will range from at least 30 to a maximum of 40.
The government previously set the green fee caps for public-type golf courses at 188,000 KRW on weekdays and 247,000 KRW on weekends through the 'Notice on Designation of Public-Type Golf Courses,' which has been in effect since January 1 of this year. Golf courses with higher green fees than these caps cannot be designated as public-type.
However, there is a considerable possibility that non-membership golf courses will raise green fees to offset the increased ICT, which would undermine the government’s policy goal of easing golfers’ green fee burdens. Individual golf courses might also significantly increase food and beverage prices to pass on the costs.
Nonetheless, experts predict that in the current situation where the COVID-19 boom is fading and the 'golf craze' is subsiding, it will not be easy for non-membership golf courses to raise green fees in this manner.
Seo Cheon-beom, director of the Korea Leisure Industry Research Institute, said, "The purpose of establishing non-membership golf courses is not to collect more taxes but to lower green fees, so I support the imposition of the ICT." He added, "Some voices suggest that individual golf courses might raise green fees by the amount of the ICT. However, given the recent cooling of the golf craze, such a decision will not be easy."
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