Recent reports have cited cases involving stars such as Cha Eun Woo, reportedly linked to 20 billion won in tax matters, and Honey Lee, reportedly linked to 6 billion won, sparking public debate over the structure and oversight of individual artists’ management companies.
On March 1, People Power Party MP Jeong Yeon Wook, a member of the National Assembly’s Culture, Sports and Tourism Committee, announced that he had proposed a partial amendment to the Popular Culture and Arts Industry Development Law. The bill aims to eliminate blind spots in the oversight of entertainment agencies and establish greater tax fairness within the industry.
Representative Jeong explained: “This bill is a minimum safeguard to increase transparency and accountability in the industry and to restore fair order.”
According to data his office received from the Ministry of Culture, Sports and Tourism (MCST), as of the end of last year, there were 6,140 arts and popular cultural planning agencies registered nationwide. While only 524 new agencies were registered in 2021, last year the number rose to 907. The legislature’s office attributed the surge to the K-content boom, which led to the rapid emergence of individual agencies and small-scale businesses.
The problem lies in the current management system. At the moment, issues such as registration, modification and closure of agencies fall entirely within the purview of local governments. The MCST, the main supervisory ministry, has no legal basis to comprehensively monitor the status of these agencies at the national level.
Under the proposed amendment, agency operators would be required to annually report their registration and the status of their business to the Minister of Culture, Sports and Tourism, allowing for centralized control. Information developed by local governments should also be submitted to the ministry, breaking what critics describe as a “non-interactive” structure that has allowed loopholes to persist.
The bill also strengthens the disqualification criteria. Current law bars people convicted of sex crimes or child abuse from entering the entertainment planning industry, but does not impose such restrictions on those convicted of tax crimes.
The amendment would expand the disqualification to include people sentenced to heavier fines or penalties under the Tax Offenses Punishment Act. The restrictions would apply not only to agency representatives but also to employment within those companies.
Representative Jeong noted: “The rise of one-person agencies is a natural trend, but it is an open secret in the industry that many are created solely to reduce taxes, without performing any real management function. There are numerous agencies that are essentially paper companies.”
He added, “Every time the National Tax Service publishes a list of high-value tax delinquents or announces audit results, celebrity names inevitably appear. This is closely linked to current structural loopholes.”
Highlighting the global influence of K content, the legislator concluded, “Although K-content is a global market leader, the agency management system remains outdated. We can no longer allow institutional loopholes where individuals with a history of tax evasion continue to operate in the planning industry.” He also urged the Ministry of Culture, Sports and Tourism not to hide behind the excuse of delegated authority to local governments, but to take direct responsibility for monitoring.
Sources: Nate
