Government Require Allotment to KBS

The government has decided that the Korea Broadcasting System (KBS), as a government enterprise which has not shared its profits with the government so far, should divide its profit reporting into two parts –television receiving fees and normal profits – in order to share some of its income with the government, counting the net profit by the ratio of those two parts.

“We have requested to KBS about the allotment, but KBS asserted that, ‘We are managing the company by television receiving fees, so allotment is impossible,’” remarked the person in authority on November 11. He added, “According to this reply, we will split their entire income into two parts – television receiving fees and regular income – in order to require the allotment from the latter part.”

It means that profits from television receiving fees can be admitted to reserves, but as for regular profits coming from other sources, it has to be shared with the government.

Sales of KBS last year was $1.07 billion, consisting of television receiving fees of $0.4 billion (37.3 percent), and regular income, such as commercial fees, was $0.67 billion (62.7 percent).

If we apply the gravity of regular income, 62.7 percent, to the net profit of last year ($85 million), about $53 million will be the target of allotment.

According to this measure, KBS has contradicted the decision that the ratio of income structure cannot be directly applied to the periodical net profit.

“Television receiving fees have to be left out of the entire sales figure,” remarked Jung Sung-jin, vice-chief accountant of KBS, pointing out, “The government made a wrong decision to include television receiving fees in the entire sales figure. To count it with the regular income is nonsense.”

In recent times, when government asked for an allotment, KBS held out against it, stating reasons such as “special charges.” Television receiving fees cannot be included in the budget of government, and if television receiving fees are left out of the entire sales figure, the deficit cannot be easily filled.

KBS, since its foundation as a government enterprise in 1973, has not offered any allotments to the government. In 1984, its net profit ran over the limit which it was permitted to keep. KBS once offered the profits to the government but that ordinance was soon removed.

Ki-Jeong Ko koh@donga.com