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Hagwon (cram schools and other private learning institutes) exceeded 12 trillion won ($11 billion) in annual revenue last year despite the ongoing economic slump.
According to the National Tax Service (NTS) Wednesday, about 134,000 private learning institutes were operating across the country in December 2011.
Of them, institutions opened under individual names earned an average of 65 million won a year, totaling 8.56 trillion won, while those registered under corporate names made combined 3.87 trillion won, or an average of 1.78 billion won per establishment.
In total, hagwon operators earned 12.46 trillion won ($11.33 billion) in 2011, up 8 percent from 11.55 trillion won the previous year. This was the first time the revenue figure surpassed 12 trillion won.
According to the tax agency, there are many types of learning institutes, such as cram schools preparing students for university entrance exams, art academies, language institutes and vocational schools.
With cram schools accounting for about 70 percent of all registered privately-run educational institutions, parents here are spending more money in a bid to enable their children to achieve higher scores in university entrance exams and thus enter prestigious schools.
The number of learning institutes established under individual names inched down to 131,874 from 133,579 over the one-year period. But those opened under corporate names soared 20.4 percent to 2,175, meaning hagwon here have become larger in size.
The NTS also found that incorporated private learning institutes have seen their income jump at a faster rate than individually-run ones.
``Income disparities between small and large hagwon have been deepening amid the current economic downturn. Large-sized, incorporated establishments have been able to better weather the slump and make more money,’’ an NTS official said.
About 46.3 percent of institutes opened under corporate names, or 1,008, were registered in Seoul, generating a total of 2.6 billion won.
Additionally, 24,039 individually-run hagwon, or 18.2 percent, operating in the capital city made a combined 2.3 trillion won.
The tax agency said it audited 59 learning institutes last year and imposed back taxes on them totaling 41 billion won.
It said only 73 percent of hagwon were found to have accepted credit cards as a payment tool, with the rest refusing to take plastic from customers in a bid to underreport their earnings.
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