Financial industry spent most on entertainment

Financial corporations were found to have the highest entertainment expenses among all industries in 2013, the tax collector reported on Monday.

Analysts said the results indicate that the financial industry could be hurt most by the new anticorruption bill set to take effect in October next year.

In 2013, the country’s 18,518 financial firms, including insurers, banks and brokerages, spent a total of 750 billion won ($661.7 million) as “entertainment spending,” including expenditure on gifts, meals and drinks, recreational expenses and other service fees, according to the annual tax report of the National Tax Service.

On average, each financial firm spent 40.5 million won on entertainment, by far the highest among the 14 industrial sectors. This is more than double the average spending of the total 517,000 companies, which stood at 17.4 million won.

Since 2007, the financial sector has topped the entertainment expense list of the state tax agency, the NTS’s data revealed.

The entertainment costs of the manufacturing industry was placed second with an average of 27.4 million won, followed by the health care industry’s 26.7 million won, and the transportation and telecommunication industry’s 14.4 million won.

The high “networking costs” of financial firms, who face stronger regulatory scrutiny compared to other sectors, often involves reception gatherings with present or former high-profile government figures, in the form of high school homecoming, college alumni gatherings and other private events.

The report was released six days after Kim Young-ran, former head of the Anti-Corruption & Civil Rights Commission, expressed regret over the antigraft law named after her, and said it was partly softened from her original draft before being passed by parliament earlier this month.

The law subjects public officials, journalists and private school faculty to a maximum jail term of three years or a fine of five times the amount they accepted in monetary or nonmonetary valuables, provided they are worth more than 1 million won.

The bill, to go into effect September 2016, also prohibits civil servants from receiving money, gifts or entertainment, including food, of more than 30,000 won in value from parties held in professional capacities.

By Chung Joo-won (joowonc@heraldcorp.com)