Drive Forward to Do Away With the Special Excise Tax On Golf Courses

Starting next year, a plan is going to be formulated to remove the special excise tax from the greens fee of golf courses run in membership systems.

The Ministry of Finance and Economy stated on June 14 that it will present a revised bill of the special excise tax law within this year, abolishing the exceptional excise tax imposed on the greens fee from next January.

The Ministry of Finance and Economy added that golf courses that will be included are only the ones that will lower local taxes, such as the property tax, and that are within the districts of cities.

The Ministry of Finance and Economy explained that the reason for such a decision is because it is advantageous in the aspect of tourism to absorb the costs of domestic golf players by dropping the entrance fees of golf courses, since the amount of annual foreign currency spent by local tourists who go overseas to play reaches almost 300 billion to 500 billion won. Once the special excise tax imposed on greens fee is repealed, the entrance fees for golf courses—that may vary according to their locations and services--are expected to diminish approximately 24,000 to 26,000 won from now.

The current national taxes added to the greens fee total 21,120 won including △The special excise tax, 12,000 won △The special tax for agriculture and fishery as well as the education tax that accounts for 30 percent of the special excise tax, 3,600 won each△The value added tax that sums up 10 percent of the special excise tax, the education tax, and the special tax for agriculture and fisheries, 1,920 won.

Also, the local taxes such as the acquisition tax, the property tax and the total land tax are heavily imposed as much as five times for each local self-governing body, shifting responsibility for the local tax of estimation of about 3,000 to 5,000 won from the proprietors of golf courses to golfers.

Kim Nak-hoe, the chief of the Consumption and Tax System in the Ministry of Finance and Economy said, “A revised bill of the special excise tax law that we will present to the National Assembly only applies to the local self-governing bodies that reduce local taxes,” and added, “The key point lies in reduction of local taxes by the self-governing bodies around the Metropolitan area in which the demand for using golf courses always exceeds the supply.

Jin-Hup Song jinhup@donga.com