South Korea to tax lip jobs and priests
Print Edition
The South Korean government plans to exploit the country’s obsession with plastic surgery by extending taxes to popular procedures like lip jobs to help fund spiralling social welfare costs.
The proposed new tax codes slap a 10-percent value added tax on procedures like lip augmentation, double-jaw surgery and body hair removal, beginning 2014, the finance ministry said yesterday.
Until now, VAT has only been levied on the so-called “big five” treatments — nose jobs, liposuction, facelifts, breast jobs and double-eyelid surgery.
“Our taxes on medical treatments for cosmetic purposes are revised in line with global standards,” the ministry said, adding that most advanced nations tax all medical treatments for aesthetic purposes.
But few countries can match the per capita spending on cosmetic surgery of South Korea, where one in every five women is estimated to have undergone at least one procedure.
The new code will also impact previously untaxed religious leaders like monks and priests, who will face a 4 percent levy on religious honorariums — payments for services — from 2015 after a year-long grace period, the finance ministry said.
The government estimates the changes — once approved by lawmakers — will help bring in an additional 2.49 trillion won (US$2.23b) in tax revenue over the next five years.
“Our fiscal conditions face a very challenging situation,” Finance Minister Hyun Oh-Seok said. “The new tax revenues will be used to offer more welfare support for people who need help.”
President Park Geun-Hye, who took office in February, promised new welfare programs for the poor and the elderly during her presidential campaign.
Export-reliant South Korea faces a struggle to fund burgeoning social welfare costs from having one of the world’s most rapidly ageing populations.
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