Korean firms’ annual usage of corporate credit cards at hostess bars once again reached more than $1 billion in 2013, according to a report by the National Tax Service.
Koreans businesses spent 746.7 billion won ($733.1 million) at “room salons” with corporate credit cards last year, followed by “danlanjujeom,” karaoke bars with hostesses, with 211 billion won and yojeong with 100.6 billion won. Yojeong is a place where hostesses are dressed in the Korean traditional Hanbok.
It is a well-known fact that hostesses at most of the room salons, danlanjujeom and yojeong offer sexual services.
The report, released Monday by Rep. Park Myung-Jae of the ruling Saenuri Party, also reveals that companies spent 41.6 billion won for nightclubs and 133.9 billion won for performance bars.
Prostitution is illegal in Korea but the government overlooks companies’ use of their money for sexual entertainment.
In an effort to boost the sagging economy, the Lee Myung-bak administration even scrapped a regulation in 2009 that required companies to provide explanations on every entertainment expense exceeding 500,000 won.
Entertainment spending at “luxurious” bars by corporate cards stood at 1.41 trillion won in 2009, 1.53 trillion won in 2010, 1.41 trillion won in 2011, 1.28 trillion won in 2012 and 1.23 trillion won in 2013.
The entire corporate expenses on entertainment reached 7.5 trillion won in 2009, 7.7 trillion won in 2010, 8.4 trillion won in 2011 and 8.8 trillion in 2012. The tax authority has yet to combine figures for 2013, but expects last year’s total corporate entertainment expenditure, which is tax deductible, to be over 9 trillion won.