Noblesse oblige executed“You must calculate your inheritance tax honestly. My father [Samsung Group founder Lee Byung-chull] told me to pay tax on levels acceptable to the people,” said the late Samsung Chairman Lee Kun-hee, son of the Samsung founder, when he reported his estimated inheritance tax to the National Tax Service (NTS) in 1988 on behalf of family members. After the family of Lee Kun-hee, including Samsung Electronics Vice Chairman Lee Jae-yong, reported their inheritance tax to the NTS on Wednesday after his death last October, what Lee said while alive still reverberates. Lee’s family reported its estimated tax of 12 trillion won ($10.8 billion), nearly half of what it inherited from the late chairman.
The amount of the reported inheritance tax is one of the largest in the world. The biggest inheritance tax in Korea so far was 921.5 trillion won paid by the family of LG Group Chairman Koo Bon-moo, who passed away in 2018. Overseas, the family of Apple founder Steve Jobs paid $2.8 billion as inheritance tax after he died from a rare form of pancreatic cancer in 2011.
Owners of large Korean companies who mostly inherited massive wealth from their founding fathers have long been criticized for their practice of paying much less tax than required after donating their shares to nonprofit foundations they created after their father’s death. Yet they were bent on strengthening their control of companies their fathers left behind. Given the enormous size of inheritance tax reported by Samsung this time — which is even larger than all inheritance tax paid in Korea over the last three years — the family’s action deserves appreciation as it will surely help elevate public trust in chaebol.
Samsung also promised to donate a massive number of top-caliber paintings and other art collected by Lee Kun-hee and cash, worth in total 4 trillion won. Samsung decided to donate over 23,000 pieces of expensive art worth 3 trillion won in appraisal value to appropriate agencies across the country and 1 trillion won in cash to the medical field to help fight the pandemic and allow children suffering from rare diseases to get medical services they need.
In an essay in 1997, Lee Kun-hee stressed the role of companies to contribute to enhancing cultural infrastructure of a country as they are members of an increasingly competitive society in cultural terms.
In meetings with CEOs of Samsung Group, he underscored the mission of companies to improve the health of humankind and the quality of lives. Samsung’s donation and contribution has paved the way for the people to enjoy first-class arts and maintain better health. We welcome its decision.