The quasi-tax "traffic inducement charge" borne by landlords of traditional markets and used-car dealerships will be cut by up to 70% starting in October. The building owner pays the traffic inducement charge, but in many cases the expense is actually passed on to tenants, reports say. The Ministry of Land, Infrastructure and Transport expects this measure will ultimately reduce the burden on small business owners who are tenants of traditional markets and used-car dealerships.
The Ministry of Land, Infrastructure and Transport said on the 31st it will preannounce a revision to the Enforcement Rule of the Urban Traffic Improvement Promotion Act reflecting these details through May 11.
The traffic inducement charge is an economic levy imposed on owners of buildings that generate traffic. In urban areas with populations of 100,000 or more, those who own 160 square meters or more within buildings with a total floor area of at least 1,000 square meters (㎡) are subject to the charge. The traffic inducement charge is calculated by multiplying the total floor area by the traffic inducement coefficient, which quantifies traffic generated by building use, and by the unit charge per square meter (350–1,000 won/㎡).
According to the revision, the Ministry of Land, Infrastructure and Transport (MOLIT) lowered the traffic inducement coefficients for traditional markets, used-car dealerships, and tourist hotels. The ministry selected facilities closely tied to the livelihoods of ordinary people as targets for reductions. First, in cities with populations of 1 million or more, the coefficient for traditional markets was lowered from 5.46 to 1.68. As a result, the traffic inducement charge is expected to decrease by 70%. In the same large cities, the coefficients for exhibition facilities (1.49→0.43) and tourist hotels (2.62→1.64) will also be reduced. The corresponding reduction rates in the traffic inducement charge are 71% for exhibition facilities and 37% for tourist hotels.
If ownership of a building changes or if the traffic inducement charge is 3 million won or more, one may apply for a partitioning payment plan, and the payment period will be extended from the current one month to three months. In addition, if individual building parking information is provided in real time to the government's parking information system, the charge can be reduced by 10%. The initial system installation expense can be subsidized at actual cost within 20% of the charge.
Jeong Chae-gyo, director-general for comprehensive transport policy at the Ministry of Land, Infrastructure and Transport (MOLIT), said, "With this revision, we will swiftly push forward follow-up procedures so that small business owners and the tourism industry, who are struggling with high inflation and rising oil prices, can feel tangible expense savings."