[Annual Activity Report 2017] Refresh Korea : A Caring Society that Cares for All
- About PSPD
- 2018.11.01 (17:20:43)
Annual Activity Report 2017 <Refresh Korea>
Refresh Korea - A Caring Society that Cares for All 1
Monitoring Samsung and the Law
In 2008, an independent counsel investigating corruption at Samsung, found 1,199 borrowed-name accounts used by Chairman Lee Kun-hee's, but accepted Lee's claim that the assets were inherited, and acquitted him of the charges without fully revealing the exact size and details of the slush funds. Ten years later, in 2017, checks used for the construction of Lee's home and other projects raised the issue of Samsung's slush fund again when it was confirmed by the independent counsel that none of the accounts used revealed used real names.
This was not all. The National Tax Service, which should have imposed inheritance taxes on Chairman Lee's real-name property under the Financial Real-name Act; and the Financial Services Commission, which has to impose fines and income taxes at the time of name change, have not done so. In 2008, Chairman Lee and Samsung had announced that they would pay the missing tax and not spend the remaining money on the chairman and his family, instead finding ways to use it for profitable endeavors. However, these promises have not been met.
The People's Solidarity for Participatory Democracy (PSPD) judged that such behavior from chaebols undermines the basis of the financial real-name system, and beyond criticisms of illegal behavior, actively responded to the establishment of financial transaction regulations. PSPD had the independent counsel confirm whether borrowed-name accounts had been change to real-name, and insisted on the importance of enforcing taxation. Furthermore we confirmed the principle of the Financial Real-name Law that income tax should be withheld at the rate of 90%, and raised and monitored this issue with the National Tax Service and the Financial Services Commission.
In addition, PSPD, through a government audit, confirmed and publicized the issue of taxation on borrowed-name accounts, investigated the source of funds for the newly revealed suspicious borrowed-name accounts, as well as plans for taxation. In the end, the suspicions raised by the PSPD turned out to be true. At present, the Democratic Party has established a Task Force related to the taxation of Chairman Lee’s borrowed-name account by, but the issue is yet to be resolved. The PSPD will keep an eye on this issue and call for a fair resolution. In addition, we will continue to monitor the relevant tax authorities, the National Tax Service and the Financial Services Commission, to ensure that taxation and fair financial transaction regulations are in line with the law and established principles.
• 08.03 [Accusation] Accusation against Lee Kun-hee for violating ‘Regulation and Punishment of Criminal Proceeds Concealment’ and the act on ‘Real Name Financial Transaction and Confidentiality’
• 10.17 [Press Conference] Public condemnation of the financial and taxation authorities that gave an indulgence for Lee Geon-hee's tax evasion and his monopolization of the real-name financial system
• 10.30 [Comment] Need for a 90% withholding tax against Lee Geon-hee’s borrowed-name assets, in accordance with the act on ‘Real Name Financial Transaction and Confidentiality’
• 11.30 [Comment] Doubt over the indulgence towards Lee Kun-hee’s concealed overseas accounts cannot be ignored
Refresh Korea - A Caring Society that Cares for All 2
Collecting Tax Equitably and Using it Fairly
Korea is a typical 'low burden, low welfare’ state. On the other hand, the demand from the people for welfare expansion is increasing day by day. It is necessary to redistribute wealth through new tax policies and expand the tax base in order to expand welfare. PSPD urged for the normalization of corporate taxes and the strengthening of taxation on assets. In addition, we actively raised the issue of tax waste, such as the 'resource diplomacy' of the Lee Myung-bak administration.
We gave a positive assessment of the government’s revised 2017 tax bill of, which included increases in nominal tax rates for corporate and income taxes. We published a report which argued that businesses would be able to sufficiently handle the increased corporate tax burden, and also produced a “card news” brochure explaining the need to normalize corporation taxes. In the end, the National Assembly passed an amendment to the Corporate Income Tax Act, which raises the corporation tax rate from 22% to 25% for companies with a tax base of more than 300 billion won.
In order to strengthen the fairness of asset taxation, we released a report on the direction of the Comprehensive Real Estate Tax reform, which targets the top 1%, the taxation on rental income that has been neglected, and the normalization of abnormal property disclosure prices. The report received media attention and contributed to the formation of public opinion in favor of strengthening taxation to deal with unequal property ownership. In addition, we strongly criticized attempts to backtrack on the taxation of clergy, filed a written opinion on the enforcement decree of the Income Tax Act, and spearheaded a people’s petition addressed to the Blue House.
• 03.02 [Fundraising] ‘같이가치 (Value of being together): our tax should not be pocketed.’ (96 members, 777,000 won)
• 06.01 [Issue Report] Plan for the reorganization of the Comprehensive Real Estate Tax to enhance taxation on the top 1%
• 06.27 [Issue Report] The reality of the resource diplomacy under the Lee Myung-bak administration and now
• 07.13 [Issue report] Plan for reorganization of rental income tax for realization of tax justice
• 08.07 [Issue Report] Analysis of burden on companies from corporate tax reform
• 11.22 [Card News] Why should corporate taxes be raised?
• 11.28 [Press Conference] Initiative to enact the National Prosecution Act for fiscal democratization
• 12.12 [Statement of Position] Opinion on the amendment of the enforcement ordinance of the Income Tax Act for taxation of clergy
Refresh Korea - A Caring Society that Cares for All 3
Bread for All, and Roses Too
"I wanted to show the children that justice can win"
It was a victory that took five years. In 2013, the residents of Yongsan in Seoul found out that the 18-story building, located 215 meters from the Sacred Heart Girls’ Middle-High School, would be a screen horse racing gambling hall. A protest committee, consisting of residents, parents, teachers, and clergy, conducted 1,705 days of anti-gambling campaigns and 1,440 days of live-in-tent protests. Alongside Yongsan residents, the PSPD participated in the campaign holding a large number of press conferences, as well as releasing five administrative reports, three criminal accusations, two audit requests from the Board of Audit and Inspection, two National Assembly debates, and two legislative petitions. Eventually, the Korean Horse Affairs Association decided to suspend the gambling operation on December 31, 2017.
According to the National Statistical Office (NSO), the monthly average household spending on communication for two Koreans in 2016 was 144,000 won, accounting for 5.6% of the total expenditure on consumer spending following the necessities of life, education, and transportation expenses. The PSPD held a one-man protest to abolish the basic mobile communication fee and released an issue report. Even though we failed to change the basic fee, the discount rate for selective contracts was raised from 20% to 25%, and measures to reduce telecommunication costs for low income people were drawn up.
Together with small and medium-sized merchant groups, activities to root out unfair practices in distribution, affiliation, and agency sectors continued. We filed complaints against franchise headquarter executives and organized media coverage and contested claims of unfair treatment in each field. We urged reform of the Fair Trade Commission, appealed to the National Assembly for legislation changes, and presented administrative reform tasks. A revision of the Franchise Business Act passed the National Assembly, and the Fair Trade Commission announcing measures to root out unfair practices.
• 07.11 [Accusation] Accused the chairman of Mr. Pizza of interfering in the activities of franchisee groups and intervening in elections
• 08.21 [Press Conference] Choosing a discount rate of 25% higher, should existing subscribers continue to pay a penalty?
• 08.28 [Convention] Held a closing ceremony for the Yongsan screen horse racing gambling hall
• 09.07-26 [Discussion] A series of discussions on economic democratization in the areas of franchises and agents, cultural unfairness, subcontracting and technology exploitation, and Fair Trade Commission reform
• 09.25 [Press Conference] Praise for the Holiday Highway toll waiver and additional suggestions
• 10.17 [Press Conference] Evaluation of College Tuition Policy by Moon Jae-In Government and proposals
• 12.11 [Press Conference] Call for protection of tenants through joint declaration from 1,004 tenants, citizens, and people from religious communities and civil society
• 12.22 [Event] The 4th Annual ‘Colorful Tuition’ Camp
Abolition of Non-Transparent University Entrance Fees
From 0 won to 1,030,000 won, the enrollment fee for each university is a burden on families, but the bigger problem is the lack of transparency in how the fees are calculated and used.
In September 2015, PSPD proposed a new admission reform bill and began to raise questions surrounding university admission with related organizations. Through a disclosure of information, we found that the basis for enrollment fee calculation and enforcement details were unclear. We reported the unfair admission system to the Fair Trade Commission and filed a lawsuit on behalf of 10,000 college students to return the entrance fee. On November 29, 2017, the Council for the Improvement of the Admission Fee system, formed through an agreement between private universities, college students and the Ministry of Education, decided to abolish the entrance fee. As a result, the entrance fee will be completely abolished in 2018 for national and public universities and 2022 for private universities.
• 2015.09.02. [Press Conference] Initiation of amendment bill for enrollment fees and delay of graduation
• February 22, 2016. [Issue Report] Report on the results of requiring disclosure of information for the entrance fees of 34 Universities
• 2016.09.22. [Public Benefit Report] Reports to FTC about the excessive unfairness of college entrance fee
• October 25, 2016. [Litigation] Support of suits of 10,000 students in college to get their entrance fee returned
• 2016.11.22. [Discussion] What is the Solution for Multifarious University Admission Fees?
• 2017.09.08. [Direct action] Picket urging entrance fee abolition in front of Private College Presidents' Council meeting
Refresh Korea - A Caring Society that Cares for All 4
Regulating Citizen Risk Zones
The so-called 'Regulation Free Zone Act', was promoted by the Park Geun-hye administration on the pretext of regional development. However, the reality is that the act neutralized regulations designed for public interest in various fields such as healthcare, the environment, and personal information, while relaxing regulations in other areas at the request of the large conglomerates. Reckless deregulation threatens the lives and security of citizens and damages the openness of society. In this regard, the PSPD has worked with various citizen and labor organizations to dismantle the bill.
PSPD, alongside NGOs such as the Free Medical Center, the Environmental Movement Association and the Progressive Network Center, provided evidence that the bill was an act of reciprocity for bribes received by Park Geun-hye from chaebol leaders.
In addition, we publicized the problems with the 'Regulation Free Zone Law' through written statements and press conferences, and called for the abolition of the bill. We held several meetings with members of the National Assembly Strategy and Finance Committee, and led efforts to prevent the passage of the bill through pressure on the National Assembly.
• 01.23 [Press Conference] Accusation against 'Park Geun-hye, Choi, Soon-sil and the FKI' for pushing forward with the 'Regulation Free Zone Act'
• 02.15 [Statement of Position] Civil society group opinion on the problems with the 'Regulation Free Zone Act'
• 03.17 [Press Conference] Demanded representatives of 4 parties halt negotiations regarding the ‘Regulation Free Zones Act’
• 04.18 [Press Conference] Condemnation of Ahn Cheol-soo who agreed with the 'Regulation Free Zone Act'
• 05.04 [Card News] “Do not be fooled by advocates of the Regulation Free Zone Act”
• 11.09 [Press Conference] Establishment of “Joint Action for the Protection of Life and Safety, and the Abolition of the Regulation Free Zone Act and the Service Industry Development Act”
Refresh Korea - A Caring Society that Cares for All 5
A Society where Labor is Treated with Dignity
Nearly half a million workers a year do not receive their proper salary, totaling a grand sum of 1 trillion won in lost wages per year. The amount of Korean wage arrears is constantly increasing, and is larger than most comparably sized economies. Workers who do not receive wages on time suffer a situation comparable to dismissal or unemployment, whereas employers face no legal liability or economic costs beyond paying back wages when caught. Therefore employers do not take the issue of delayed wages seriously.
PSPD decided that it was imperative to create institutional measures to prevent wage arrears and promote prompt payment. First of all, we tried to reveal the actual situation of delayed payment of wages in Korea. We prepared a report on the status of wages on the basis of Ministry of Employment and Labor, and National Assembly data, and internal data confirmed by requests for information disclosure. We pointed out that the precise cause of delayed wages cannot be grasped by the current method of calculating the statistics used by the Ministry of Employment and Labor.
We raised the issue of the number of violations and the details of measures by the Ministry of Employment and Labor in relation to wage payment, including nonpayment of the minimum wage, and through this have seen a rise in social consensus on the need for the punishment of violators. According to recent data (as of August 2017), the number of cases of minimum wage violation sent to the prosecution by the Ministry of Employment and Labor, has increased three fold on the previous year. The next issue the PSPD plans to tackle is the unfair distribution of profits between original contractors and subcontractors. In addition, we will be monitoring the Fair Trade Commission and the Ministry of SMEs and Startups’ actions, in regards to the issue of payments between original contractors and subcontractors in determining the solvency of small and medium-sized enterprises.
• 05.29 [Issue Report] Report on the Actual Condition of Wage Remuneration of Practical Business Executives as a Result of the Labor Inspection in 2016
• 07.26 [Questionnaire] Questionnaire regarding the speech of Lee Un-ju, first vice floor leader of the People's Party, regarding the direction of party’s policy on the issue of the delayed payment of wages
• 09.13 [Issue Report] Wage repayment report: analysis of work supervision and the reporting of cases, and suggestions for eliminating delayed payment of wages
• 11.29 [Questionnaire] Policy inquiry related to ‘establishing fair trade regulations between original contractor and subcontractors in order to comply with minimum wage laws and for the elimination of the delayed payment of wages’