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Incheon Airport mulls duty-free shops for arrivals to South Korea

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Incheon Airport mulls duty-free shops for arrivals to South Korea

South Korea's Incheon International Airport is considering the addition of duty-free shops in arrivals areas, a proposal that has drawn opposition in the past, The Korea Times reported Aug. 7.

Incheon submitted a report to a South Korean lawmaker about the possibility of opening two duty-free shops in Terminal 1 and one in Terminal 2, according to the report. They would be run by small- and medium-sized businesses selling perfumes, cosmetics, liquor and cigarettes rather than luxury brands. The airport forecast an annual sales target of 100 billion South Korean won.

South Korean law prohibits duty-free shops for arriving air passengers, as sales would not be classified as exports and therefore would not allow such shops to be tax-exempt.

Korea Customs Service is reportedly against the plan due to customs law as well as smuggling concerns. The agency issues licenses for duty-free shops.

In addition, South Korean airlines including Korean Air and Asiana Airlines oppose the plan because they risk losing in-flight duty-free customers. Such sales amount to about 330 billion won for the carriers annually, according to the report. The country's duty-free industry is also against facing additional competition.

Incheon noted that 132 other airports in 71 countries operate arrivals duty-free shops, with 53 of them in 27 Asian countries, including Singapore and Hong Kong, the report said.

As of Aug. 7, US$1 was equivalent to 1,129.54 South Korean won.