▲ Labor Minister Lee Jeong-sik (Yonhap)

labor unions-accounting transparency

Gov't to make dues paid to unions defying accounting disclosure ineligible for tax deductions

SEOUL, June 15 (Yonhap) -- The government announced Thursday it has revised regulations to make union dues paid to organizations defying accounting disclosure ineligible for tax deductions.

It marks the latest in a series of government policies to reform the labor sector and is expected to run into vehement resistance from labor unions already at loggerheads with the government over crackdowns on labor rallies.

Under the revised enforcement decrees of the trade union act and the income tax act, the dues paid to unions refusing to disclose its accounting will not be eligible for up to 30 percent of tax deductions.

Under the current labor union law, heads of labor unions with 1,000 union members or more are required to make account settlements public every fiscal year. Currently, however, members of such labor unions are given tax deduction benefits of up to 30 percent on dues they pay to the unions, regardless of whether the accounting disclosure requirements are met or not.

The ministry said that the revised ordinances will go into force at the beginning of next year after getting approved by the Cabinet in August. An enforcement ordinance revision is not subject to parliamentary approval.

Under the revised ordinances, labor unions would also be required to appoint accounting auditors who have previous career records or expertise in the accounting or financial sectors. Currently, no specific regulations exist with regard to who and how labor unions appoint accounting auditors.

"I expect the latest upgrade of the system could further activate a healthier labor movement," Labor Minister Lee Jeong-sik said, calling on labor unions to adhere to the accounting transparency requirements.

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