Government to introduce 'church taxes'

By Kim Tae-jong

The government is expected to collect income tax from priests, monks and other members of religious groups who have been exempted from taxation on their earnings for decades, officials familiar with the issue said Wednesday

The move is part of the finance ministry’s tax code revision to expand tax revenue and develop a fair taxation system under the principle that “there is tax where there is income.”

“The finance ministry is in discussion with religious groups for this matter,” an official from Ministry of Strategy and Finance said. “If they can successfully form a consensus, the ministry will include taxation on clergy to the tax reform bill that will be announced on Aug. 8.”

The idea of taxation on religious professionals was first discussed in 1968 and the government has pushed ahead with its plan to tax the clergy but failed due to strong opposition from religious groups.

Religious groups argued that they should not be treated as salaried workers because their religious activities are different from ordinary work that earns money.

But there is growing understanding between religious groups that clergy should be no longer excused from tax-paying duties, which is a positive sign for the legislation of the taxation on clergy, said the official.

Currently, Catholic priests and some Protestant church leaders are voluntarily paying income tax but a large number of religious professionals, including monks, still do not pay tax, raising inequality issues.

Korea has about 360,000 priests, monks and other members of religious orders, and taxing them is expected to raise about 100 billion won in additional annual revenue.

The government has sought ways to reduce the number of ‘blind spots’ in taxation to expand the tax base and support President Park Geun-hye’s welfare policies.

The ministry’s tax reform bill, subject to approval by lawmakers, is also expected to include plans to increase the tax burden on the rich and offer more benefits to the poor in an apparent gesture to achieve a fairer taxation system.

The outline for the bill is that a household with high income will have lower tax deduction from their expenses such as medicine and education while low income families will get more tax returns, especially those with children.