Tourists to get tax refund for South Korean cosmetic ops

South Korean group Hello Venus performing at a concert in Seoul this month. The concert was free for foreigners, in a bid to recover the tourist numbers lost during the Mers outbreak. The government hopes to give the sector a further boost by introdu
South Korean group Hello Venus performing at a concert in Seoul this month. The concert was free for foreigners, in a bid to recover the tourist numbers lost during the Mers outbreak. The government hopes to give the sector a further boost by introducing tax breaks for cosmetic procedures for tourists.PHOTO: AGENCE FRANCE-PRESSE

SEOUL • South Korea is taking duty-free shopping to a whole new level, with plans to exclude face lifts, breast enlargements and liposuction from value-added tax for tourists.

Desperate to boost tourism after an outbreak of the Middle East respiratory syndrome (Mers) hurt the economy, the country will give tourists a 10 per cent refund on cosmetic surgery for a year, starting from April next year.

Mers led to a more than 40 per cent drop in the number of tourists visiting South Korea in June. The number of visitors from Taiwan and Hong Kong fell the most, by 76 per cent and 75 per cent, respectively, from a year earlier.

The number of procedures performed in South Korea covers about 2 per cent of the population. Of the more than four million such procedures performed worldwide last year, about 5 per cent were done in South Korea, trailing only the United States, Brazil and Japan, according to the International Society of Aesthetic Plastic Surgery.

A SHOT IN THE ARM

The tax change should lift the number of Chinese visitors next year, although South Korea should really make this permanent to give it a real boost. The number of medical tourists may fall if the yuan falls further.

MR KIM SOO WOONG, a director at the Korea Health Industry Development Institute

Now, officials are hoping the tax break will bring in more tourists and boost the economy, although a weaker yuan may be a party pooper for Chinese visitors.

"The tax change should lift the number of Chinese visitors next year, although South Korea should really make this permanent to give it a real boost," said Mr Kim Soo Woong, a director at the Korea Health Industry Development Institute.

"The number of medical tourists may fall if the yuan falls further," he said, noting that visitors from Russia and Mongolia dropped when the rouble declined.

Seoul's BK Plastic Surgery, located in the so-called beauty belt of Gangnam alongside hundreds of other cosmetic surgery clinics, offers airport pick-ups and makes hotel reservations for foreign clients. The clinic has about 20 surgeons and 15 interpreters, speaking languages such as Mandarin, Japanese and English.

Its website features messages from South Korean celebrities popular in China.

South Korea's gross domestic product (GDP) grew just 0.3 per cent in the second quarter from the previous three months.

The South Korean government hopes to make about 3.5 trillion won (S$4.2 billion), or about 0.2 per cent of GDP, from medical tourism by 2020, up from 726.3 billion won as of 2012, according to the Korea Tourism Organisation. 

The number of tourists visiting South Korea for medical procedures more than tripled to 266,501 last year from 81,789 in 2010.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on August 19, 2015, with the headline 'Tourists to get tax refund for S. Korean cosmetic ops'. Print Edition | Subscribe