[EDITORIALS]Fighting for Freedom of the PressThe situation has worsened. The National Tax Service forced three newspapers, JoongAng, Chosun and Dong-a, to pay more than 80 billion won ($62 million) each in back taxes and reported majority shareholders, owners and accountants of six newspapers to the prosecutors. As we have said many times, we respect tax probes done by appropriate procedures and accept any decisions made through such processes. We believe that the press cannot be sacrosanct; it must make efforts at self-regulatory reform to correct the bad practices of the past.
But the recent media tax investigation gives the strong impression of being part of a larger scenario to oppress the press, critical newspapers in particular, rather than a fair tax levy. The investigation was inequitable and unbalanced.
The National Tax Service employed nearly 1,000 officials for 130 days to investigate 23 media companies, all no bigger than medium-size enterprises, and the Fair Trade Commission stepped in to revive discontinued regulations applying to newspapers. Collecting 254.1 billion won, more than half of the total back tax levy, from three newspapers, JoongAng, Chosun and Dong-a, threatens their existence. There is a hidden intention, and it is not fair taxation. Under the current tax law, how many companies can survive if the authorities comb their books for possible omissions and apply the highest level of estimation to collect back taxes? The application of tax law and the amount of back taxes to be paid were decided arbitrarily. Free promotional copies, which comprised the bulk of the amount of alleged tax evasion, are used to attract readers. Media firms do not feed those newspapers to business contacts or stuff them into drinking glasses of guests. It is wrong to designate free copies exceeding 20 percent of paid circulation as taxable entertainment expenses.
The tax service reported to prosecutors that the JoongAng Ilbo destroyed documents related to taxes, but the company obeyed the law: a company must keep books and documents related to taxes for five years. The National Tax Service notified the media companies before the investigation that it would look at dealings from 1996 to 1999. Therefore, this newspaper threw out expired records, using lawful processes, with no harmful intent. The National Tax Service also reported this newspaper to prosecutors for excluding transactions worth 2.3 billion won from its books. That money was raised from selling a resort at the west coast during our restructuring, and the company never intended to let the money flow out. Calling such money "improper funds," as if the company is extremely corrupt, can only be interpreted as the intent to abuse the tax investigation for smearing the press.
Furthermore, the National Tax Service broke a precedent by announcing the full outcome of the investigation not just on the companies to be prosecuted but on all companies investigated. Nine days after that announcement, it publicized its report to the prosecutors. The intent was to weaken the ability of the press to criticize the government by painting those newspapers as immoral and unethical.
Although the National Tax Service emphasized that the recent probes were fair, how can it say that the investigation was practical and that it resulted in fair taxation if the companies involved could not understand or accept either the process or the outcome? We will seek administrative and legal remedies to clarify these issues. The National Tax Service and related offices should understand that attempts to gag the press have never been successful and never will be.