Amid allegations of ₩20.0 billion KRW (about $13.8 million USD) in tax evasion against Cha Eunwoo, a member of the group ASTRO and an actor, a so-called “Cha Eunwoo Prevention Act” is being proposed.
On March 1, Jeong Yeon Wook, a member of the People Power Party, announced that he would officially propose the amendment to the Act on the Development of the Popular Culture and Arts Industry. He proposed a revision requiring entertainment agency operators to report their registration and business status annually to the Minister of Culture, Sports and Tourism.
The amendment introduces a clause requiring planners to report their registration and business status to the Minister of Culture, Sports and Tourism annually. The Ministry will manage these comprehensively, and local governments will also be required to submit their handled cases to the Ministry.
Additionally, the amendment includes individuals fined or sentenced for violating the Punishment of Tax Crimes Act as disqualified persons. Current laws restrict planning operations by sex offenders and child abusers but do not impose limitations on those punished for tax evasion. The amendment adds those fined or sentenced for violations of the Punishment of Tax Crimes Act to the disqualification criteria. This applies not only to agency heads but also to employees of such companies.
According to data obtained by Jeong Yeon Wook’s office from the Ministry of Culture, Sports and Tourism, as of the end of last year, there were 6,140 registered popular culture and arts planning companies. New registrations numbered 524 in 2021 and increased to 907 last year.
Rep. Jeong Yeon Wook said, “While K-content is leading the global market, the management system for agencies remains outdated. We can no longer tolerate institutional loopholes that allow individuals with prior tax evasion records to openly engage in planning businesses.” He urged, “Stop hiding behind the excuse of leaving it to local governments; take direct responsibility for management and supervision.” He added, “This bill is a minimal device to enhance industry transparency and accountability to establish a fair order.”
Cha Eunwoo underwent a high-intensity investigation last year by the 4th Investigation Division of the Seoul Regional Tax Office on suspicion of tax evasion. The National Tax Service notified him of a tax claim exceeding ₩20.0 billion KRW (about $13.8 million USD), including income tax. This is known as one of the largest tax claims ever imposed on an entertainer. After receiving the notice, Cha Eunwoo’s side requested a tax review to examine the appropriateness of the national tax agency’s decision.
Cha Eunwoo’s agency Fantagio stated on January 22, “This issue primarily concerns whether the corporation established by Cha Eunwoo’s mother qualifies as a substantial taxpayer. It is not a finalized or officially notified matter, and we will actively provide explanations regarding legal interpretations and application issues through proper procedures.”
Fantagio said, “The artist and tax representatives will sincerely cooperate to promptly conclude the relevant procedures. Cha Eunwoo pledges to faithfully fulfill his tax reporting and legal obligations as a citizen.”
In an apology posted on social media on January 26, Cha Eunwoo wrote, “I am currently serving in the military, but this controversy was never a deliberate choice to avoid it. Last year, I reached a point where I could no longer postpone my military enlistment, so I enlisted without concluding the tax investigation. I will faithfully attend to the ongoing tax procedures and humbly accept any final decisions made by the authorities, taking responsibility accordingly.”
On January 27, Fantagio released a second statement: “We feel a heavy responsibility for the controversy involving the company and our artist. The ongoing issue is currently under fact verification by tax authorities, and both the agency and the artist are fully cooperating within their respective capacities.”
Fantagio added, “Should legal or administrative judgments become clear going forward, we will responsibly implement necessary measures based on the outcomes. However, we strongly urge the public to refrain from reckless speculation, the spread of unverified information, and excessive overinterpretation regarding the claims and suspicions raised.”