Discount Rate Raised from 5% to 7% for Non-Metropolitan Districts
10% for Metropolitan Areas, 13% for Non-Metropolitan Areas
The minimum discount rate for Local Love Gift Certificates will be raised from 5% to between 5% and 7%, while the maximum discount rate will be increased up to 20%. The plan is to stimulate consumption by applying additional discounts for specific regions, such as areas experiencing population decline or those designated as special disaster zones.
The Ministry of the Interior and Safety announced that, starting September 1, Local Love Gift Certificates with increased discount rates of up to 20% will be issued nationwide until the end of the year. The government has allocated 600 billion won secured through the second supplementary budget to support the increased discount rates, aiming to generate additional consumption by year-end.
From this day forward, the discount rates will be applied in a more detailed manner depending on the issuing local government. Previously, Local Love Gift Certificates were generally issued with a discount rate of 5% to 10%. Moving forward, the rates will be increased to between 7% and 15%, depending on the type of local government, such as those in the metropolitan area, non-metropolitan areas, or regions with declining populations.
For non-metropolitan autonomous districts such as Seoul, the discount rate has been raised from 5% to 7%. Previously, both metropolitan and non-metropolitan areas offered a discount rate of 7% to 10%, but now the rates have been differentiated to 10% for metropolitan areas and 13% for non-metropolitan areas, increasing benefits for non-metropolitan regions. In areas experiencing population decline, the rate has been raised from 10% to 15%. Additionally, for local governments designated as special disaster zones, an extra 5 percentage points will be added to the basic discount rate. Therefore, in population-declining regions that are also designated as special disaster zones, the maximum discount rate benefit reaches 20%.
Furthermore, autonomous districts within special and metropolitan cities will now be able to issue Local Love Gift Certificates with increased discount rates through direct national funding. Previously, national funding was provided only to metropolitan governments, not to individual autonomous districts. However, as more autonomous districts have recently begun issuing Local Love Gift Certificates, the decision was made to provide direct national funding.
The Ministry of the Interior and Safety stated that local governments nationwide plan to issue a total of 10 trillion won worth of Local Love Gift Certificates by the end of the year. Starting this month, the issuance of gift certificates with higher discount rates aims to sustain the upward trend in consumer sentiment that has been revived by consumption coupons.
Minister of the Interior and Safety Hoonjung Yoon said, "The nationwide increase in Local Love Gift Certificate discount rates will serve as another opportunity to boost consumer sentiment, which has been revived through consumption coupons. Moving forward, we will continue to develop Local Love Gift Certificates as a key policy for balanced regional development and to promote a virtuous cycle in the local economy, through phased and differentiated support and further increases in discount rates tailored to each region."
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