[2025 Audit] Departure Tax Cut to 7,000 Won Causes Annual 130 Billion Won Loss to Tourism Fund

Cho Gye-won: "A Populist Tax Cut That Is Strangling the Industry"
Ministry of Culture Also Says, "An Increase Is Inevitable... 20,000 Won Is Appropriate"

Travelers are lining up for check-in at Incheon International Airport Terminal 1. Photo by Yonhap News

The financial foundation of the tourism industry is being shaken as the Tourism Promotion and Development Fund has sharply declined due to the Yoon Suk-yeol administration's reduction of the departure tax. Both the government and the National Assembly appear to agree that an increase in the departure tax is inevitable.

On October 14, Assemblyman Cho Gye-won criticized the policy during the National Assembly’s Culture, Sports and Tourism Committee audit, stating, "The reduction of the departure tax has resulted in an annual loss of 130 billion won for the tourism fund," and called it "a populist tax cut policy that is strangling the tourism industry."

Since July, the government has lowered the departure tax imposed at airports and ports from 10,000 won to 7,000 won and expanded the exemption age from under 2 years old to under 12 years old. As a result, a major source of revenue for the Tourism Promotion and Development Fund has been significantly reduced, causing setbacks in various projects such as expanding tourism infrastructure and supporting small and medium-sized enterprises.

Assemblyman Cho expressed concern, saying, "When the fund is depleted, the first to suffer will be small and medium-sized tourism businesses and small merchants," and added, "The industry, already hit by COVID-19 and aviation disasters, is now facing another crisis due to financial difficulties."

During the COVID-19 period, the tourism fund borrowed 2.3807 trillion won from the Public Capital Management Fund, with repayments set to begin in 2030. Assemblyman Cho pointed out, "Globally, tourism and departure taxes are on the rise, but our country is moving in the opposite direction." He noted that while major tourism countries such as Japan, Thailand, and Vietnam have raised their tax rates or introduced new tourism taxes, Korea has reduced its only tourism tax, the departure tax.

He stated, "Adjusting the departure tax is not simply a tax increase, but a way to restore a sustainable foundation for Korea’s tourism industry," adding, "Our office will also push to introduce a related bill."

In response, Minister of Culture, Sports and Tourism Choi Hwi-young said, "Since its introduction in 1997, the departure tax had never been increased, but the previous administration reduced it, leading to a decrease in revenue for the tourism fund. Considering inflation and international cases, the appropriate amount should be much higher than 10,000 won."

Kim Daehyun, the Second Vice Minister of the Ministry of Culture, Sports and Tourism, also agreed on the need for an increase, stating, "If we use inflation as a basis, about 20,000 won would be appropriate." Assemblyman Cho added, "Although the final amount has not been decided, we will thoroughly discuss with the Ministry and stakeholders to come up with a restoration plan." He also noted that last year he urged former Vice Minister Jang Miran to restore the departure tax to its original level and received a response acknowledging the need to consider an increase.