From the new year, people who donate to local governments outside their residential address will receive tax deductions as well as gifts from the receiving area.

According to the interior ministry on Thursday, annual donations under five million won, or around four-thousand U.S. dollars, will receive tax exemptions as well as local gifts from the area, such as food or accommodation, that amount to 30 percent of the donation.

Starting from January 1, donations of up to 100-thousand won will be fully deductible, while any amount in excess will be eligible for a 16-point-five percent tax exemption.

Local governments are expected to use the donations to enhance the welfare and economy of their respective regions.