Top 1% Corporate Entertainment Expenses Decrease by 26% Since Kim Young-ran Act

[Asia Economy Reporter Kwangho Lee] The average entertainment expenses of corporations that filed corporate tax last year recorded the lowest level in the past 10 years. This trend has significantly decreased since the implementation of the Anti-Graft Act, commonly known as the Kim Young-ran Act.

On the 2nd, Yang Hyang-ja, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, analyzed the 'Status of Entertainment Expenses of Corporations Filing Corporate Tax (2010~2019)' submitted by the National Tax Service. According to the analysis, over the past 10 years, 59,113,413 corporations spent entertainment expenses totaling 96.5174 trillion KRW.

The average entertainment expenses of these corporations decreased by 3%, from 17.42 million KRW to 16.89 million KRW between 2010 and 2016. However, after the Kim Young-ran Act was enforced, the expenses decreased by 16% (from 16.89 million KRW to 15.31 million KRW) between 2016 and 2019.

It was found that larger corporations with higher revenue, which tend to spend more on entertainment expenses, experienced a greater reduction in such expenses. The average entertainment expenses of the top 1% of companies based on revenue decreased by 26%, from 561.16 million KRW in 2016 to 414.74 million KRW in 2019. The average entertainment expenses of the top 10% of companies also decreased by 20% during the same period.

Representative Yang said, "Since the enforcement of the Kim Young-ran Act in September 2016, the average entertainment expenses of corporations have significantly decreased," positively evaluating the effect of the Anti-Graft Act.