VAT frustrates pet owners

By Kang Seung-woo

The government’s plan to impose a tax on medical treatment for pets faces a great deal of opposition, as veterinarians as well as owners are compiling a petition to reverse it.

The Ministry of Strategy and Finance announced in August that a 10-percent value added tax (VAT) will be levied on such medical treatments from July 2011. The introduction of the new tax is being pushed as part of efforts to increase tax revenue and plug shortfalls expected for next year.

Last year the government tried to pass the bill only to drop it after meeting intense resistance from those affected by the issue.

According to ministry officials, vets and animal hospitals have so far received tax benefits, but the new tax is being introduced based on the global standard that only medical treatment for humans is exempted from VAT.

However, those who oppose it argue that few countries currently impose VAT on medical treatment for pets.

“It is quite out of the question. Among what we call developed economies, a few countries in the European Union and Japan impose VAT and only three states in the United States — Hawaii, New Mexico and South Dakota — slap the pet treatment with a surtax,” Kwak Jung-kwon, president of the Seoul Veterinary Medical Association (SVMA), told The Korea Times.

Pet owners also complain that the government is trying to raise indirect taxes from pet owners, most of whom are ordinary people, while reducing taxes for the rich.

“I think the government seems to think pet owners are all rich, but it is not true,” a pet owner, who did not want to be identified, told The Korea Times.

In its opposition to the government plan, they filed an online petition on the Agora section of the Daum portal site, calling for the government to remove it, which drew support from 8,991 people.

Those who are against the imposition are concerned that the VAT will trigger serious social problems — the misuse of drugs on pets and abandoned animals.

“It is inevitable for animal hospitals to hike medical bills due to the additional tax. So people who are worried about the expense are likely to try to cure pets by themselves, self-prescribing vaccines and pesticides instead of going to hospitals,” Kwak said, adding that even people who do not have a license can treat pets in Korea.

The opponents also point out that the soaring bills will spur an increase in the already large number of abandoned pets, usually dogs.

“Due to the absence of medical insurance for pets, visiting a veterinary clinic costs a lot of money, which is one of the main reasons why people give up breeding pets. But the additional tax will worsen the situation,” he said.

According to him, the cost for abandoned pets was 980 million won in 2003, but in 2008 this ballooned to 8.5 billion won.

부가세로 애완동물 주인들 울상

정부가 애완동물 진료에 대한 부가가치세 부과를 또다시 결정해 애견인들과 동물병원들이 반발하고 있다.

기획재정부는 세수확보의 차원으로 내년 7월부터 애완동물 치료에 10퍼센트의 부가가치세를 부과한다고 지난 8월에 발표를 했다.

정부에 작년에도 이 법안을 내놓았지만 강한 반발에 부딪혀서 성사시키지 못했다.

기획재정부에 따르면 수의사들과 동물병원은 세제 혜택을 받아왔지만 국제적 기준에 따라서 부가가치세를 부과하기로 결정하였다.