Archive for: June 2011

Imposing a 1% levy on internet game industry

A bill imposing a new additional tax to Korean game industry will be laid before Bill screening committee on 16th, June.

The bill says “Minister of Ministry of Gender Equality & Family(MGEF) is able to collect taxes within 1% of total sales from the internet game providers in order to operate facilities for treating and preventing Internet game addition.

Last year’s total sales from the Korean online game industry were about US$4.3 billion, which means the 1% would be US$43.5 million.

The reason MGEF is trying to legalize the bill, reportedly, is to supplement their shrunken budget from the game industry.

However, there are plenty of rooms for objections.

1)     Since not all internet games cause the game addiction problem, an equity issue arises. Since the tax depends on the total sales even loss-makers need to pay the tax forcibly.

2)     MGEF did not even plan who and how to organize the tax from the new bill.

3)     The levy is usually what gambling industry like horse racing pays, which means MGEF is considering the Korean internet game industry as one of the gambling industry.

If the bill passes Bill screening committee on 16th of June, it will lay the bill before the Congress after passing the judgment of the Legislation and Judiciary Committee.