By Kim Jae-won
Financial firms have been spending the most in entertainment expenses since 2007, according to data from the National Tax Service, Monday.
Financial firms spent an average 40.5 million won ($35,700) on entertainment in 2013, the biggest amount among the 14 industries classified by the tax agency.
The data comes after the National Assembly passed an anti-corruption bill earlier this month which criminalizes government officials, teachers and journalists who take gifts, money, or dining worth 3 million won or more per year from the same person.
Those who violate the rule can be punished with up to three years in jail, or a fine of five times what they accept in money or valuables. The law will go into effect after an 18-month grace period.
The manufacturing industry came second with an average of 27.4 million won in 2013, followed by the health industry with 26.7 million won. An average firm in the wholesale industry spent 16.5 million won on entertainment expenses in 2013 while a logistics company paid 14.4 million won.
“The assets of an average financial firm are bigger than other industries. So are there entertainment expenses,” said an NTS official.
The NTS data showed that Korean companies spent some 9 trillion won on various entertainment expenses, including dinners and drinks, in 2013 ― an 80 percent spike from 5.4 trillion won in 2004. Entertainment expenses have been on the rise since 2000, with the only exception being in 2005.
In terms of total entertainment expenses by industry, manufacturing marked the largest amount with 3.1 trillion won in 2013, accounting for 34.6 percent of total expenses in the field. The logistics industry came second with 1.7 trillion won, or 19.2 percent, followed by the service industry with 1.4 trillion won, or 15.8 percent.
Experts say the government should stop providing tax benefits for entertainment expenses. The NTS offers 12 million won of a basic tax deduction for entertainment expenses per year, and provides additional deductions for up to 0.2 percent of a company’s revenue.