The government recently said in next year's budget guidelines that it will "normalize levies such as the departure payment." This reverses, after two years, the previous administration's plan for a "sweeping overhaul of levies" announced in 2024. At the time, the government said the overhaul would reduce the annual burden on individuals and corporations by 2 trillion won.
Normalizing levies may help secure fiscal capacity, but critics say it will ultimately increase the public's burden.
◇ About 90 "shadow taxes" levies… decreased through the previous administration's sweeping overhaul
A levy is money imposed, under the beneficiary-pays or polluter-pays principle, on those who receive benefits from a specific public-interest project or who cause social expense through negative externalities. For example, 841 won of the price of a pack of cigarettes (4,500 won) is collected as the National Health Promotion Levy.
Unlike taxes, levies are often embedded in public utility charges or various admission fees, so the public pays them without realizing it. They are therefore also called "shadow taxes" or "quasi-taxes."
In Korea, the number of levies exceeded 90 after the 1990s but fell to 82 last year. During the Yoon Suk-yeol administration in 2024, the Ministry of Economy and Finance (now the Ministry of Planning and Budget) pushed to abolish 18 of 91 levies and reduce 14. It was the first sweeping reform in 22 years.
So far, 10 of the 18 targeted for abolition have been abolished or reduced. A representative case is the Water Quality Improvement Levy imposed on bottled water manufacturers and importers to protect groundwater resources. The departure payment dropped from 11,000 won in 2024 to 7,000 won now. As a result, total levy collections were planned to decline from 2.42 trillion won in 2024 to the 2.3 trillion won range last year and this year.
◇ Departure payment attached to airfare was cut… now expected to rise again
But as the Lee Jae-myung administration moves to "normalize levies," levies scrapped by the previous administration may be revived, or reduced ones may rise again. The prime example is the departure payment. After President Lee Jae-myung said recently that "a hike in the departure payment is necessary," the ruling party introduced a bill to raise it to 20,000 won.
A government official said, "Depending on the issue, even among items restructured as part of levy reform, we can restore them or increase them if necessary," adding, "Items newly raised as necessary during public debate, such as a 'sugar levy,' could also be introduced."
Raising levies expands fiscal capacity. If levy funds are thickened, there is no need to cover shortfalls in public utilities with general taxes. However, from the public's perspective, expense burdens will suddenly increase. There are concerns that hikes in everyday levies—such as the departure payment, the international exchange contribution related to passports, and the surcharge on movie theater tickets—could heighten consumer dissatisfaction.