Yoido Full Gospel Church holds a service at its main hall in Seoul on April 26, 2020, in this file photo. (Yonhap)
SEOUL, Sept. 26 (Korea Bizwire) — The effective tax rate among religious institutions is still low despite a new taxation policy for religious organizations, tax agency data showed Sunday.
Rep. Jang Hye-young of the Justice Party referred to a National Tax Service report indicating that the effective tax rate for religious organizations in 2020 was no higher than 0.7 percent.
Some 90,000 religious entities reported income of 1.6 trillion won (US$1.16 billion) in 2020.
However, excluding expenses and deductions, they paid no more than 12 billion won in taxes, resulting in a low effective tax rate. This means that each religious entity paid an average of 133,000 won.
In contrast, the effective tax rate among wage workers (19.49 million people) was 5.9 percent, with each worker paying 2.27 million won, which is 17 times more than what religious entities paid.
The average income of the top 100 richest religious entities was 287.9 million won, with an effective tax rate of 12.1 percent.
In the same year, the effective tax rate among wage workers making between 100-300 million won was 14.6 percent. The effective tax rate among those making between 300-500 million won was 27.5 percent.
Religious organizations are allowed to report their income as either ‘other income’ or ‘work income’. If reported as ‘other income’, the expense ratio jumps up to 80 percent, allowing for higher tax deductions.
Lina Jang (linajang@koreabizwire.com)
