Suggestions to Promote the Hometown Love Donation System

Abstract

고향사랑기부제 활성화 방안 (농정포커스 211호)의 영문판이다.

From January 1, 2023, the Hometown Love Donation System (HLDS) is enforced to vitalize local economies.• A donor can donate up to 5 million won to a local government where he or she does not reside. Donors are provided a tax credit for their total donations up to 100,000 won, and for 16.5% of their donations that exceed 100,000 won.• By using the donations, local governments implement projects for enhancing residents’ welfare, such as supporting vulnerable groups in local communities.• Local governments provide return gifts to donors within 30% of their donations.Although public awareness of hometown love donations is rising, the overall awareness level is low.• The proportion of people who are aware of the HLDS was only 12% in a survey conducted in April 2022, but increased to 35% in an August survey.• As 24% of people who are aware of the system itself do not know about its concrete content, active publicity for raising public awareness of hometown love donations is needed.• Even though 48% of respondents did not express if they agreed with the donations due to their low awareness of the HLDS, 44% of respondents agreed with the system, which shows relatively high sympathy for it.• As for the desired donation amount, 100,000 won or less accounted for 46%, and 52% of respondents preferred community-based gift certificates as return gifts.• Those who wanted their donations to be used to support socially vulnerable groups made up 52%.The central and local governments and the National Assembly should make various efforts to promote the HLDS.• It is necessary to refer to Japan’s hometown tax payment system, which has taken root as precious finances for local development by improving the system and increasing awareness of it although the amount donated was not significant in the early stage.• The government’s active publicity is needed to raise public awareness of hometown love donations.• Local governments should plan projects funded by the donations, strengthen communication with donors, and develop proper return gifts so that the HLDS can contribute to enhancing local residents’ welfare and vitalizing local economies.• Given that 2023 is the first year of the introduction of the system, it is necessary to select a moderate number of return gifts and provide community-based gift certificates and online gift certificates that can be used at online malls for local specialties.• The National Assembly should closely monitor the overall HLDS and rapidly improve it.