Sauna owner describes snub of double-entry bookkeeping

At a public sauna that would require time to search for in narrow alleys in Seoul`s Bongcheon-dong neighborhood, the owner received a Dong-A Ilbo reporter at a makeshift office set up by transforming leftover space on Friday. The space seemed to be under one pyeong, or 3.3 square meters.

Patrons then entered moments later. Most of them were self-employed who were wearing slippers or middle-aged homemakers wearing no cosmetics and carrying baskets containing shampoo and towels.

The owner, 51, counted the number of customers the old-fashioned way: by writing in a worn-out notebook whenever they came in. Since he could not afford to hire a part-time worker, he folded piles of orange-colored towels by himself. A typical neighborhood public bath, the facility had 462 square meters of floor space. Admission is 5,000 won (4.6 dollars) and disposable shampoo packet goes for 300 won (28 cents) each.

The owner has run the sauna for 15 years, but has agonized over a problem since two years ago. He raised the admission fee to reflect higher tap water and electricity fees, and this raised annual sales to more than 75 million won (71,000 dollars). The higher turnover, however, made his business subject to a regulation on double-entry bookkeeping as set by tax law. He had to visit a certified public accountant due to a flurry of required financial documents, including an income statement, purchase and sales accounts, assets and liability statements, sales and general management accounts, and overall accounts.

“I work from 3 a.m. to 7 p.m. alone and earn about 1 million won (970 dollars) a month. Then I must pay 70,000 won (63 dollars) per month, or 800,000 won (758 dollars) a year, to my accountant. A self-employed person with a small business like mine has a little tax to dodge...,” he said.

Certain stores have given up double-entry bookkeeping, and are instead paying an additional tax of 20 percent of the net tax. Another public sauna owner, 57, who has run his business in Seoul`s Doksan-dong neighborhood for 13 years, said, “It`s cheaper to pay the extra tax since it costs more than 100,000 won (95 dollars) per month to hire a public accountant for double-entry bookkeeping.”

yhkang@donga.com