Religious Tax Exemptions Questioned

Do religious officials have to pay payroll taxes?

It has been accepted as very natural not to collect the payroll tax from religious people in Korea.

The current Income Tax Act doesn’t have any provision on whether or not to require religious organizations to withhold the payroll tax from religious people’s paychecks.

In regard to this, civic groups, including the People’s Coalition for the Freedom of Criticizing Religious Groups (PCFCR) argued that the government should collect the payroll tax from religious people.

“Artists and writers have to pay payroll taxes under the current law,” said a spokesperson of the PCFCR. “Religious people must pay the tax, too.”

He also said, “Of some 100,000 registered pastors, 97 percent don’t file income tax returns to the government,” adding, “In regard to their income level, it is estimated that pastors with 100 followers get paid about 30 million won to 40 million won annually, and those with 1,000 followers get paid as much as 100 million won.”

Regarding this, the PCFCR accused Lee Ju-seong, commissioner of the National Tax Service, of power abuse and duty neglect last week to the Seoul Central District Prosecutors’ Office.

But some people stand in opposition, saying, “Religious people receive contributions from followers, which is a form of patronage and therefore should be exempted from taxation.”

They also argued, “Religious people’s work is not a job, but a service,” adding, “We should regard this as financial assistance for their service.”

The government is being extra careful about this issue.

The source from tax service said, “Even though religious organizations deal with followers’ contributions as income and assign some of them to pastors as a form of salary, it is a tricky matter if we can see it as earned income.”

In fact, some European countries have already levied payroll taxes on religious people.

Currently, most Catholic clergy pay the payroll tax, and recently, Yun In-jung, the pastor of Incheon Peace Church and Baek Yeong-min, pastor of the Incheon Naseom Church, have volunteered to pay the tax.

Despite such a move, it will take time for the government to conclude its position because collecting taxes from religious people is a very sensitive issue that is not easily judged by law.