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Lawmakers seek to stop tax evasion by private tutors

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Published : 2014-03-24 21:26
Updated : 2014-03-24 21:26

Korean lawmakers are pushing to revise a law on private education to prevent tax evasion by private tutors, political sources said Monday.

The law revision, which is sought by members of both the ruling Saenuri and the main opposition Democratic parties, seeks to crack down on those who register themselves as private tutors, but run facilities that work like private institutions, or hagwon.

“There have been a series of mass-scale private lessons (outside of institutions), but the current law has minimal regulation on restricting the number of students that can be taught by private tutors, said Rep. Yoo Ki-hong of the Democratic Party, who proposed the revision of the act with nine other DP lawmakers. The revision would allow each tutor to teach one student at a time.

Rep. Kim Se-yeong and nine other lawmakers of the Saenuri Party proposed the clause that would mandate every tutor to register with authorities. The current law does not require college students to register.

The Seoul Metropolitan Office of Education held a city-wide inspection on private tutors and found that 18.6 percent of them had violated the law in connection with registration, tuition fees and other requirements.

The official number, however, shows only a small part of illegal private tutoring. An association of private education institutions in Gangwon Province earlier said that there are many hagwon-like private tutors, in which three to five tutors form teams and illegally teach multiple subjects to a number of students. It said these tutors evaded taxes by not registering with education offices.

Facilities that are not registered as hagwon can only teach one subject.

Because these facilities ― called “tutor rooms” here ― are not registered, officials have a hard time cracking down on violations.

Many tutors prefer running tutor rooms rather than setting up a hagwon to pay fewer taxes. Because tutor rooms are run in residential buildings like apartments, it is more difficult for education officials to check for illegal activities. The lax regulation allows them to falsify the number of students they have, which allows them to evade taxes.

By Yoon Min-sik (minsikyoon@heraldcorp.com)

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