SEOUL: The South Korean government is planning to impose an income tax on pastors, monks and priests for the first time, starting next year, on the back of changing public sentiment toward religious leaders.
The Finance Ministry announced last week that the revised Income Tax Law will take effect in January. With the change, all employees at religious institutions, including Buddhist monks, Protestant pastors and Catholic priests, will be required to report their income to the tax agency. “We know that many citizens support this, but we also understand religious groups’ stance, because it is the first time they will experience” the tax, said Finance Minister Kim Dong-yeon at a media briefing last week. “We will continue to listen to their opinions, discuss with them and persuade them.” Second- and third- generation clergy are not uncommon in the country, and the antipathy toward monks and priests has resulted in a tail wind for President Moon Jae-in, who has pressed for a heavier burden to be put on more privileged sections of society. Despite the change, clergy members will still enjoy many tax privileges compared with other workers. For instance, the Finance Ministry excluded income they earn for directly related to religious duties from taxation. Since it is up to the institutions themselves to define religious and nonreligious activities, the new tax policy may not raise much revenue. Religious institutions will also be able to keep separate books one for the institutions’ income and expenses, and another for wages paid to clergy. The tax agency can only audit the latter for the purpose of calculating taxable income, thereby leaving the overall picture of institutions accounts murky. The Finance Ministry released a sample income tax table for employees of religious institutions.
