Posted September. 08, 2008 08:27,
Asian works are all the rage in the global art market. Modern Chinese artists whose names barely made headlines three to four years ago have seen the price tags of their works go up by the day. Thirty-six out of 100 living artists whose works sold for the highest prices last year in global auctions were Chinese. The sales volume of auctioned works in China reached 3.2 trillion won last year, making China the world`s third-largest art market after the United States and the United Kingdom. Japan has also made significant strides along with China in art sales. The Japanese art market has grabbed the spotlight after a work by Takashi Murakami fetched 15.16 million U.S. dollars at Sothebys.
In contrast, sales volume of art works in Korea was merely 220 billion won (236.5 billion dollars) last year despite an unprecedented boom. The Korean market pales in comparison to those in China and Japan, and has been rapidly shrinking due to the economic slowdown. Another negative factor at work is the adoption of transaction taxes on art sales. The Strategy and Finance Ministry said it will tax 20 percent of what an artwork owner makes on sales worth more than 40 million won. The decision invited a backlash from artists who say the tax will diminish transactions, which will discourage them from creating new works.
In the United States, the art tax is eight to 28 percent of sales margin based on other capital gains when selling art works that have been owned for more than a year. The United Kingdom`s tax range is 10 to 40 percent. It is logical to believe that where there is income, there is tax. Things are simply too harsh for artists and their patrons in Korea, however. Since the Korean market for art sales is still in its nascent stage, most trade occurs underground, which means collecting taxes will be challenge in itself. Therefore, adopting a tax system based on those of countries with a mature art market and frequent trade of expensive art works should be reconsidered.
The government should also think about the implications of the tax system on culture. Many aspiring artists are seriously considering changing their careers as college seniors given how hard it is to make a living in the art and cultural fields. It is time for the government to help Korean artists at a time when Asian art has gained momentum on the global stage. The tax system can be introduced after a favorable environment is introduced to allow Korean art to flourish. A larger cause should not be sacrificed for a smaller one.
Editorial Writer Hong Chan-sik (firstname.lastname@example.org)