Protestant

Potentially Problematic Probes Prompt Protestant Protests

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In South Korea, Buddhist monks and Protestant pastors aren’t required to pay a dime of tax on their incomes. This exemption is set to end in 2018 — against vehement objections from Protestant churches.

There has not been actual legal tax exemption for the income that religious professionals make from engaging in religious activities. But for years, they have been allowed to not pay income taxes. “Nobody really knows why…religious people weren’t taxed,” reported newspaper Hankyoreh.

Some religious groups, like the Catholic Bishops’ Conference of Korea, volunteered to pay income tax in 1994, followed by the Anglican Church of Korea in 2012, but many Protestant organizations (of which, unlike Catholics and Anglicans, there are dozens in South Korea) have been reluctant to join the shift.

Finally in December 2015, the National Assembly passed an amendment to the tax code, applicable from January 2018, specifically to levy income tax on religious professionals. But the Christian Council of Korea and two other Protestant groups have set up a joint task force to block the enactment of the revised law.

The anti-reform faction blames what it calls a vague criteria and procedures for enforcing the revised law. And they are getting help from allies in the legislature to create a delay. This August, Kim Jin-pyo, a Minjoo Party lawmaker and an elder at a Baptist church, proposed pushing back the enactment of the reformed law until 2020. Kim was among 25 lawmakers from different parties that made the proposal.

The churches’ real fear, critics suggest, may have to do with something else: tax probes. If religious professionals are explicitly subject to taxation, they can also be investigated for potential tax evasion.

Lawmaker Kim suggested that he would welcome the reformed law as long as religious groups were exempted from tax probes. “The morality of religious groups may be significantly damaged if tax probes are prompted by reports related to tax evasion,” said Kim at a press conference, according to daily newspaper Hankook Ilbo. Kim added that heretical groups may abuse the system to disrupt religious order and damage their credibility.

Kim’s office did not respond to a request for comment at the time of publication.

Meanwhile, most religious groups may be accepting the revised law because it is expected to make little impact. With a long list of approved tax exemptions for religious professionals — including school expenses, meal allowances and childcare fees — only an estimated 20 percent of such workers, estimated to be over 20,000, will meet the minimum income tax threshold.

Donations such as tithes, commonly paid by members of Protestant churches in South Korea, will not be subject to taxation under this amendment, either. Tithes bring in huge sums of money, especially for megachurches with tens of thousands of members. Earlier this year, online media outlet OhMyNews reported, citing financial documents from Somang Presbyterian Church, that the church earned more than 76 billion won ($70 million) in donations from 2006 to 2008.

Public sentiment hasn’t been favorable toward the Protestants, who are notorious for “hereditary pastoral succession” and building megachurches with exorbitant yet untaxed income, amassed through donations.

The Ministry of Strategy and Finance (MOSF) estimated that the resulting extra tax yields would be around 10 billion won (roughly $9 million), according to Hankook Ilbo. “Strictly speaking, the figures cannot be confirmed,” said Kim Ji-soo, an assistant junior official at the ministry, adding that there was no official estimation for potential tax revenue.

On Nov. 22, the MOSF is expected to report its taxation proposal to the National Assembly, where the Protestant’s objections will also be examined. 

Religion endures in South Korea, where over 43 percent of Koreans identified as religious in 2015; Protestants made up 19.7 percent, Buddhists 15.5 percent, and Catholics 7.9 percent. 

 

Cover image: Money and taxes. (Ben Jackson/Korea Exposé)

Jieun Choi is staff writer at Korea Exposé. She has worked in the art industry and startups in Hong Kong and Australia.