Tourists’ Handbags Vs Luxury Tax

Special 20% Consumption Tax for Designer Bags Bought in Korea Suspended until 2014

Korea introduces a 20% tax on brand name bags, which adds to the other items its already been taxing. For more information on these taxes, you can click here.

Mr. Hayes makes his plea on the policy:

Hopefully, the committee will consider amending the tax law to scrap all punitive taxes. These taxes are simply leading more to choose foreign destinations for their luxury good purchases.

Even though he blogs about Korean law issues, Korea is not the first country to introduce this type of tax, and in fact, other areas might actually want to look into introducing something similar.

I have to disagree here, and the perfect example would be China. Two years ago, there was a lot of outrage over a local Dolce Gabana store. It went from preferential treatment, to the debate on what Mainland Chinese contribute to Hong Kong’s society. You can look up recent Chinese consumers purchasing activities here, and it really gets everyone riled up.

For those who can read Chinese subtitles, please take a look at this video:

The person says, 「這香港呀,如果不是中央政府一直照顧你們香港完蛋了。」(“Hong Kong, if it weren’t for the Central Government [BeiJing] taking care of you, Hong Kong would be finished”). This statement has been taken to really mean, that if it weren’t for the BeiJing government encouraging these tourists to go to Hong Kong, they wouldn’t even bother, and thus, Hong Kong would magically implode due to the lack of Mainland Chinese tourists. These tourists, who have a lot of money, and a major superiority complex, are not the type of people you want shopping in your country.

While 許冠傑(Sam Hui) used to sing that Hong Kong is a 「購物天堂」(“Shopping Heaven”), it gained this reputation long before mainland Chinese had any purchasing power. However, you can quickly see that tourism doesn’t really contribute that much to Hong Kong’s overall economy:

And we’re assuming that Mr. Hayes is actually correct about tourists being driven away to buy elsewhere because of the taxes, which would spill over into affecting tourism. Yeah, it may affect tourism within the country, but look at the bright side: More people will be going on tours to other countries!

Whatever taxes may be imposed on such items, as long as it’s cheaper than any taxation system China has:

You’ll always get Chinese tourists. Then they can say things like, 「没有咱门中国游客购买棒子产品的话,你们韩国经济早就完蛋了!」

Tourists will still come, whether or not we like it. The question is, what does a country have to offer beside cheap products? Because such things don’t really offer anything in return that tells people, “Hey, [insert tangible or otherwise item] is a symbol of our culture!” Now, we can talk about the merits and other issues of commoditizing a part of one’s culture, but that’s a debate for another day. Tourism brings in temporary dollars, but at the end of the day, what does a country have to bring in and maintain talent? It’s not tourism, and it shouldn’t be something that we concentrate on that heavily.

We end, with a picture from Sam Hui’s “return concert” in 2004:


13=阝12=口 J=丁 (阿)
L=氵 Z=工 (江)
–1312JLZ (阿江)
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