[Viewpoint] True Donation

Cho Hee-jin, Chief Attorney at Dambak Law Firm.

Having become a self-employed lawyer, I have come to realize how daunting taxes can be. It is distinctly different from when I lived on a salary and had taxes withheld at the source. Since the main expenses in the legal profession are operating costs centered around personnel expenses, the best legal way to reduce taxes is through donations. This is because, during year-end tax settlements, the most straightforward way to receive a tax refund compared to other items is through donation income deductions.

The more advanced a country is, the more taxes it collects, and if you evade taxes, you inevitably have to pay the price. In the West, there is a saying, "You must pay taxes even if you have to sell your coffin when you die," and a joke that "Meeting a tax office employee in the morning means a bad day ahead." Deep-rooted distrust and dissatisfaction with taxes are common across both Eastern and Western cultures. Since there is no way to avoid paying taxes, people inevitably become interested in how to pay as little tax as possible. As the biblical saying goes, "Let not your left hand know what your right hand is doing," it seems that throughout history and across cultures, if good deeds are publicized or done for personal gain, they are not considered true acts of kindness. In the past, simply giving offerings at church or making small donations to social welfare facilities was satisfying in itself and was not something to boast about as fulfilling a minimum obligation.

At some point, I started asking whether a donation would come with a receipt for income deduction during year-end tax settlement. Even without my asking, the receiving party kindly informs donors, "Donating is not a complete loss. You can get a tax refund." Including myself, it seems that among our country's citizens, very few people donate without wanting to receive a donation receipt.

According to some internet sources, the criteria for the middle class during the Joseon Dynasty included items such as owning a house with a couple of rooms, having a few plots of farmland, and possessing two or so sets of winter cotton clothes and summer hemp clothes. It also involved keeping one's honor, not violating moral principles, and speaking rightly about the country's difficulties.

On the other hand, nowadays in Korea, the criteria for the middle class are said to be related to income level, the size of the apartment one lives in, and other income-related conditions. In Western countries, although it varies by nation, criteria include foreign language proficiency, playing a musical instrument, responding resolutely to injustice, complaints, and illegality, and helping socially vulnerable groups. Thus, in Western advanced countries, the extent of one's donations seems to be one of the requirements for the middle class.

Recently, due to the COVID-19 pandemic, the government has been distributing a certain amount of money to all citizens under the name of emergency disaster relief funds and is running a campaign encouraging people to donate these funds again. It is unclear whether donations made this time will receive tax deduction benefits during year-end tax settlements, and there is debate over whether donating money received from the government qualifies as what we generally understand as a donation. Some people worry that not donating might lead to disadvantages later, while others argue that since it is uncertain how the donated money will be used, it would be more appropriate to spend it directly on self-employed individuals who are suffering, which aligns better with the purpose of the emergency relief funds.

When the International Monetary Fund (IMF) bailout crisis occurred at the end of 1997, a national gold collection campaign was launched to repay foreign debt. Citizens even sold gold items kept in their drawers, and ultimately the national crisis was overcome. Many people at that time felt proud and took pride in themselves. Why was that? Because it was a voluntary act, not done with support, but by offering their own property, and also because it was not done with the expectation of any tangible or intangible reward. It was a true act of donation. It would be good if the act of donating government support funds received due to the COVID-19 crisis could take on this form. Only then can citizens feel proud that they too contributed to overcoming the COVID-19 crisis.

Cho Hee-jin, Representative Lawyer, Law Firm Dambak