Korea is the only member of the Organization for Economic Co-operation and Development (OECD) where religious professionals are exempt from paying taxes. Although some faiths, including the Catholic Church, have voluntarily paid taxes in recent years, most of the Korean religious community has been reluctant to do so.
The government was going to impose income tax on religious professionals starting in 2015, but this was delayed until 2018 after severe opposition from the sector. Now the National Assembly is trying to delay it again, which has resulted in strong discontent from taxpayers.
It is more frustrating for tax-paying citizens that Rep. Kim Jin-pyo of the ruling Democratic Party of Korea (DPK), who led the President’s de-facto transition team, is at the forefront of National Assembly's efforts to put off religious taxation. Kim and 27 lawmakers from the four major parties last week submitted a proposal to delay the revision to the Tax Law that would begin taxing clergy members at between 6 percent and 38 percent according to their incomes starting in January 2018. Kim is allegedly looking to delay this until 2020.
Kim is a devout Christian, serving as an elder at a protestant church and leading a Christian gathering of the DPK. In pushing for the postponement, Kim underlined that there were no specific criteria and procedures for religious taxation yet. He also said that there would be negative side effects if religious tax was implemented without sufficient preparation by tax authorities and the religious community. Various sectors of society have slammed Kim’s remarks.
The controversy over taxing the religious sector has been around since the 1960s. It is hugely unfair for other taxpayers that the religious community has been able to dodge taxes for so long.
The people will not allow any more delay on religious taxation. A recent survey showed that more than 70 percent of people believe religious professionals should be taxed. Where there is income, there should be taxes. This principle should apply to all citizens, including religious professionals and organizations.
Last month, the Moon Jae-in administration said it would seek extra taxes from the super-rich and big companies as part of measures to finance Moon’s pledges for more welfare and boosting the economy. Many Koreans react very sensitively to any mention of a tax rise because they have long been struggling with stagnant wages and soaring living costs.
The Moon administration should proceed as planned with the religious taxation, which is a crucial step for promoting tax equality and expanding tax revenue. This step should be taken before raising taxes.