Assembly proposes bill to curb entertainment industry tax evasion

The National Assembly has proposed a bill aimed at eliminating tax evasion in the entertainment industry.

Singer and actor Cha Eun-woo [FANTAGIO]

The National Assembly has proposed a bill aimed at eliminating tax evasion in the entertainment industry.

Rep. Jung Yeon-wook of the People Power Party, a member of the National Assembly’s Culture, Sports and Tourism Committee, said Sunday that he had introduced a revision to the Popular Culture and Arts Industry Development Act to close regulatory blind spots in the management of entertainment agencies and establish tax fairness.

“The bill is a minimum safeguard to establish a fair order by enhancing transparency and accountability in the industry,” Rep. Jung said, explaining the purpose of the legislation.

There were 6,140 registered popular culture and arts agencies as of the end of last year, including 907 newly registered in 2025 alone, according to data submitted by the Ministry of Culture, Sports and Tourism to Jung’s office.

Jung’s office said the surge reflects the rapid emergence of independent labels and small firms riding the boom in K-content.

Actor Lee Ha-nee speaks during a press conference for the film ″The People Upstairs″ at Megabox Coex in Gangnam District, southern Seoul, on Nov. 25, 2025. [YONHAP]

Amid this growth, controversy has arisen over what critics call a “blind spot” for tax evasion, as the Culture Ministry — the competent authority — currently lacks sufficient oversight powers to closely monitor agency operations.

The issue has drawn renewed attention following allegations that actor Cha Eun-woo evaded taxes amounting to around 20 billion won ($13.65 million) and actor Lee Ha-nee about 6 billion won, with suspicions that independent labels were used to improperly reduce their tax burdens.

In response, lawmakers are pushing what has been dubbed the “Cha Eun-woo Prevention Act.” The proposed revision would bar individuals who have received fines or heavier penalties for violating the Punishment of Tax Offenses Act from establishing an entertainment agency.

The bill also newly requires agency operators to report their registration and business status annually to the culture minister and authorizes the ministry to conduct comprehensive oversight.

“The increase in independent labels is a natural trend, but it is an open secret in the industry that quite a few exist solely to reduce taxes without performing any real management functions,” Jung said. “There are numerous agencies that are little more than paper companies.”

He added that the recurring appearance of entertainers’ names whenever the National Tax Service discloses lists of high-value tax delinquents or releases the results of tax audits is linked to this structural problem.

“K-content is leading the global market, yet the management system for agencies remains outdated,” Jung said. “We can no longer leave institutional loopholes that allow those with a history of tax evasion to continue operating agencies.”

He also urged the Culture Ministry not to “hide behind the excuse of delegating oversight to local governments” and to take direct responsibility for supervision.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom. BY SHIN HYE-YEON [shin.minhee@joongang.co.kr]