On 4th, it drew attention that Jeong Ho-geun, a shaman who is a former actor who appeared in the drama "Wangcho," "Heo Jun" and "Gwanggaeto the Great" in Aug., failed to report shrine income for five years from 2017 to 2021, was caught by the National Tax Service, and was hit with a back tax bill.
Jeong said she "mistook shamanic activities for a tax-exempt business." She argued that the "blessing fee" received for fortune-telling should be considered a donation to a religious facility.
However, under current law, divination businesses such as shamanism, saju and tarot cards are also assigned a standard industry classification code (96992) and a tax industry code (930909). In any form, if you tell someone's fortune and take a blessing fee, you must register as a business and fulfill your tax obligations.
However, a ChosunBiz check found such places were very rare. A "tax blind spot" is being maintained. That said, the number of diviners registering as businesses is on the rise, likely because tax authorities are stepping up enforcement as in Jeong's case.
◇ Net profit reported by diviners up 38.2% in four years… average per person around 10 million won
According to materials the National Tax Service submitted to the National Assembly on 4th, the number of sole proprietors in the divination business who completed business registration and are operating rose from 2,830 in 2015 to 8,000 last year, roughly tripling. Over the same period, newly opened divination businesses increased from 668 to 2,713. Closures rose from 460 to 1,298, but more divination businesses opened each year.
The National Tax Service did not disclose how many unregistered diviners it cracked down on each year. Still, given the annual increase in newly registered diviners, some interpret this as the result of tougher enforcement as in Jeong's case.
Divination appears to be a growing business. Comprehensive income tax filing statistics show that the number of filers whose main industry is divination and similar services increased 43%, from 1,286 in 2020 to 1,844 in 2023. During the same period, total business income (sales) rose 67.9%, from 452.8 billion won to 760.4 billion won, and income (net profit excluding rent, etc.) rose 38.2%, from 121.4 billion won to 167.8 billion won.
However, it appears diviners do not earn that much money. Those reporting business income over 100 million won were ▲ 9 in 2020 ▲ 14 in 2021 ▲ 13 in 2022 ▲ 10 in 2023. Average annual income was around 9 million–10 million won.
◇ Actual size of divination industry presumed larger than National Tax Service tally
Still, some say the actual number of diviners is much larger than the National Tax Service's count, and their income is higher. There are three main reasons why divination, a "growth industry," remains in a tax blind spot.
① Shamans and diviners don't need to file business notifications with local governments
First, the main reason is that very few diviners register as businesses. On 1st, ChosunBiz checked 19 fortune-telling shops and tarot cafes in the Yeonnam-dong area of Mapo-gu, Seoul, and found only one location with a business registration certificate on-site. Seventeen places (89.4%) evaded answers, saying things like "I'm just staff, so I don't know," and one said it was "registered" but did not have the certificate on the premises.
An official at the National Tax Service said, "Shamans are not in a line of business that requires filing a business notification with local governments, so it is practically difficult to identify shamans operating unregistered," adding, "So we do not manage separate statistics for shamans or divination businesses. It's also hard to estimate tax amounts."
② Most blessing fees are in cash… National Tax Service proposes "make cash receipts mandatory"
Another issue is that it is rare to transfer the blessing fee by account or pay by credit card after a reading. Lee Jeong-hun, chief tax accountant at Childo Tax Group, said, "In the divination service business, 80%–90% of sales are in cash or account transfers," adding, "The amounts aren't that large, so it is realistically difficult for customers to ask for cash receipts."
If a blessing fee is taken in cash and not reported, income is omitted and no tax is paid. It is estimated that only about 10 diviners have annual sales exceeding 100 million won, so tax authorities have limited incentive to launch aggressive investigations.
③ Main business is "fortune-telling," but outwardly a cafe in some cases
Places like saju cafes and tarot cafes that serve snacks and drinks on the premises sometimes register as rest-area restaurants rather than divination businesses. Recently, a person surnamed Seo (28) who used a tarot cafe said, "I paid 60,000 won for a compatibility saju with my boyfriend and 15,000 won for bread and coffee." Normally you use a card at a cafe, but the blessing fee was cash-only, so the bread and coffee were also bought with cash. Unlike divination, bakery businesses can receive a "young startup small business" tax credit.
Recently, more divination consultations are happening on online platforms. A person surnamed An (34) said, "In Oct. last year, I received a saju consultation from a diviner who looked skilled on a platform," adding, "There was no way to confirm whether this person had registered as a business."
The National Tax Service is aware of these issues. An NTS official said, "We have proposed a legal revision to the Ministry of Economy and Finance to designate divination as a business that must issue cash receipts." Tax accountant Lee Jeong-hun said, "Saju and tarot cafes must separate and report divination-related sales, and online platforms should be required to notify tax authorities of the sales and settlement details of affiliated diviners."