Taxing the incomes of people belonging to religious groups has long been an elusive issue in Korea. As a matter of fact, the first proposal to tax priests, ministers and monks was made in 1968 by the first director of the National Tax Service.
Intermittently over the following decades, the issue has been the subject of social debate. It was reignited last August when the government said it would revise the income tax law to levy taxes on members of the clergy. But neither the government nor the National Assembly has taken any follow-up action.
Then last week, Deputy Prime Minister Choi Kyung-hwan announced that the government would not push for the proposal. Choi said that the government had been discussing the proposal with religious groups, but the latter had yet to reach a consensus.
This is hardly convincing. In fact, Catholic priests have been paying income taxes since 1994 and the clergy of the Anglican Church since 2002. Some leaders of Protestant churches and Buddhist groups also pay tax on a voluntary basis.
Choi and other government officials should explain what differences Korea has from other developed countries that impose taxes on clergy members, including the U.S., U.K., Germany, France and Japan.
Now few Koreans believe that the work of clergy members should be regarded as spiritual services that cannot be subject to government taxation. A recent opinion poll found that 88 percent of Koreans support taxation of religious people.
Taxing clergy members may not greatly help the government’s efforts to increase tax revenue, since their number is small and the government plan calls for imposing taxes on only 20 percent of their incomes.
But the government’s withdrawal of the proposal to tax religious groups runs counter to its efforts to raise tax revenue by all means, like the decision to push ahead with new taxes on cash reserves held by companies in spite of strong protests. Moreover, what’s at stake in this issue is equity and fairness in the nation’s tax policy.
Taxing the clergy will also help the nation’s religious groups become more transparent and accountable in their financial management. This is all the more necessary because it is not rare for a religious organization or leader to be implicated in corruption cases.