Recent reports have cited cases involving stars such as Cha Eun Woo, reportedly linked to 20 billion won in tax issues, and Honey Lee, reportedly connected to 6 billion won, sparking public debate over the structure and oversight of single-artist management companies.
On March 1, Rep. Jeong Yeon Wook of the People Power Party, a member of the National Assembly’s Culture, Sports and Tourism Committee, announced that he had proposed a partial amendment to the Popular Culture and Arts Industry Development Act. The bill aims to eliminate blind spots in the oversight of entertainment agencies and establish greater tax fairness within the industry.
Rep. Jeong explained, “This bill is a minimal safeguard to enhance transparency and accountability in the industry and to restore fair order.”
According to data his office received from the Ministry of Culture, Sports and Tourism (MCST), there were 6,140 registered popular culture and arts planning agencies nationwide as of the end of last year. While only 524 new agencies were registered in 2021, that number surged to 907 last year. The lawmaker’s office attributed the spike to the boom of K-content, which has led to the rapid emergence of one-person agencies and small-scale firms.
The issue lies in the current management system. At present, matters such as registration, modification, and closure of agencies fall entirely under local governments. The MCST — the primary supervisory ministry has no legal basis to comprehensively monitor the nationwide status of these agencies.
Under the proposed amendment, agency operators would be required to report their registration and business status annually to the Minister of Culture, Sports and Tourism, enabling centralized oversight. Information processed by local governments would also have to be submitted to the ministry, breaking what critics describe as a “hands-off” structure that has allowed loopholes to persist.
The bill also strengthens disqualification criteria. Current law restricts individuals convicted of sex crimes or child abuse from entering the entertainment planning business, but imposes no such limitations on those convicted of tax offenses.
The amendment would expand disqualification to include individuals sentenced to fines or heavier penalties under the Punishment of Tax Offenses Act. Restrictions would apply not only to agency representatives but also to employment within such companies.
Rep. Jeong noted, “The rise of one-person agencies is a natural trend, but it is an open secret in the industry that many are created solely to reduce taxes, without performing any real management functions. There are numerous agencies that are essentially paper companies.”
He added, “Whenever the National Tax Service releases a list of high-value tax delinquents or announces audit results, celebrity names inevitably appear. This is closely tied to the current structural loopholes.”
Emphasizing the global influence of K-content, the lawmaker concluded, “While K-content is leading the global market, the agency management system remains outdated. We can no longer allow institutional gaps where individuals with tax evasion records continue to operate in the planning business.” He also urged the Ministry of Culture, Sports and Tourism not to hide behind the excuse of delegated authority to local governments, but to take direct responsibility for oversight.
Sources: Nate