Korean Superstars Endorse Lipstick, Pizza, and Tax Compliance

At age 19, with no prior experience, Korean actress Park Min-young made her K-drama debut in the sitcom High Kick!. Her breakout role was playing Kim Yoon-hee in the 2010 hit historical drama series Sungkyunkwan Scandal, in which her character disguises herself as her brother to enter a prestigious university. Syndicated K-drama television series, along with chart-topping K-pop music, are all part of Hallyu, the "Korean wave," the term used to describe the sharp rise in global popularity of Korean culture.

One of the biggest stars in the Korean entertainment industry, Park has 8.1 million Instagram followers and is known as the "queen of K-drama rom-coms." Her popularity has won her a slew of endorsements, mostly for clothing and cosmetics. This year, one day before her 35th birthday, she was awarded yet another honorific and scheduled to begin endorsing another product. On March 3, Korea’s 55th annual Taxpayers’ Day, Park was selected to be an honorary ambassador to promote payment of taxes for South Korea’s National Tax Service (NTS).

Also selected as an honorary ambassador to promote tax compliance was 40-year-old actor Jo Jung-suk. Married to singer Gummy, Jo started his acting career in musical theater. But since 2011 he has enjoyed huge success in movies and network series, often singing the companion theme songs. He has acted in both comedies and dramas. He has played a high school teacher, a police detective, and a surgeon. He has even played an assassin who disguises himself as a court eunuch. Like Park, Jo has endorsed numerous products, including granola, gelato, and life insurance.

There are only two NTS honorary ambassadors chosen each year (see table below), but about 1,500 exemplary taxpayers, both individuals and corporations, are also honored. As explained on the NTS website: “Toward a tax culture where honest taxpayers are respected and taxes are willingly paid, the NTS has introduced the Exemplary Taxpayer System.”

Hidden Heroes

In a congratulatory message, Kim Dae-ji, the head of the NTS, said, “It is thanks to your faithful tax payment that our people can have hope to overcome the difficulties of Corona 19, and the model taxpayer is the hidden hero of the Republic of Korea.” Besides prestige, model taxpayers receive a hodgepodge of perks, including freedom from tax audits for three years, use of a business center exclusively for model taxpayers at Incheon Airport, discounted railroad fares, and free parking at national parks. A recent academic study has found empirical evidence that these rewards have a positive influence on Korean tax compliance.

Celebrity endorsements are a powerful marketing tool, and in South Korea they are especially commonplace. In that nation of 51 million, celebrities endorse everything from telephones to ramen noodles. And taking advantage of rising Hallyu worldwide, the Ministry of Trade supports KCON festivals around the globe featuring K-pop bands to promote South Korean exports. So as strange as it may seem to us here in the United States, perhaps it is not so surprising that the NTS annually enlists the support of its nation’s popular celebrities to promote compliance.

In the United States our leaders have starved the IRS of necessary funding for decades while at the same time imposing an ever-increasing workload on the agency. And can anybody remember an elected official saying anything positive about our nation’s tax system or our tax collectors? Instead of boosting taxpayer morale, they stomp on it. Perhaps it is time to stop taking cheap shots at the government agency that’s easiest to hate. It's unlikely that we will see an IRS commissioner asking a celebrity to make a video for the IRS, but perhaps we may begin to recognize that taxpayer morale is a valuable intangible asset for a government with a "voluntary" tax system.