The South Korean government will streamline 32 fees and charges that citizens are obligated to pay, but often unaware of, with an aim to reduce the monetary burden by 2 trillion won ($1.48 billion).

Under the measures unveiled during an emergency ministerial meeting on economic affairs chaired by President Yoon Suk Yeol on Wednesday, the government will comprehensively overhaul 32 fees and charges for the first time since the enactment of the Framework Act on the Management of Charges in 2002. When the four fees abolished in January 2024 are included, the government will streamline a total of 36 fees.

Fees and charges are akin to taxes collected by the government to secure funds for specific projects. Citizens often do not realize they are paying them, and they are thus referred to as “shadow taxes.”

“Although the number of fees and charges has decreased from 102 in 2002 to 91 in 2024, the amount collected has more than tripled from 7.4 trillion won to 24.6 trillion won,” Yoon said, emphasizing that the government will proactively overhaul fees and charges that burden citizens and businesses.

The government plans to start by reducing development fees, which used to take 20 to 25 percent of development profits from developers of real estate and tourism complexes for 2024 only. The government will also revise the Restitution of Development Gains Act to grant a 50 percent reduction in the Seoul metropolitan area and a 100 percent reduction in non-metropolitan areas.

The school site development fees aimed at securing funds for school sites will also be abolished and the electricity industry infrastructure fund fee, which is the largest at 3.2 trillion won, is also under scrutiny. The fee, which takes 3.7 percent from electricity bills, will be revised in 2024 to reduce the rate to 2.7 percent by the following year.

The government will also put 263 regulations under a “temporary moratorium” to allow time for review before deciding whether to abolish them. As a result, measures could be pursued to relax height restrictions on semiconductor industrial complexes, allowing for the expansion of buildings.

By Kim Jung-hwan, Woo Je-yoon, and Yoon Yeon-hae

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