Private Education Hub in Panic... National Tax Service Launches Surprise Tax Audit on Large Academies

Major Entrance Exam Company Official: "Special Tax Investigation Unprecedented"

Tax authorities have launched a large-scale tax investigation targeting major private education companies such as Megastudy, Jongno Academy, and Sidae Injae. There are growing expectations that comprehensive pressure on private education providers is being intensified.

On the afternoon of the 28th, the National Tax Service launched a tax investigation into Megastudy, a leading private education company, at the Megastudy headquarters building in Seocho-gu, Seoul. [Image source=Yonhap News]

According to industry sources on the 28th, the National Tax Service sent investigators to the Megastudy headquarters in Seocho-gu, Seoul, as well as to Sidae Injae and Jongno Academy in Gangnam-gu, Seoul, and Uway headquarters in Seocho-gu from the morning, securing accounting books and tax-related documents.

This investigation is known to be an irregular (special) tax audit rather than a routine regular tax audit. Typically, tax audits in the entrance exam industry have been conducted regularly once every 3 to 4 years, with investigations starting after a one-week prior notice.

On this day, investigations were conducted on several large academies, including Megastudy, known as the "private education giant," and it is anticipated that most of the other large academies and medium-sized entrance exam companies will soon become targets of the tax authorities.

Regarding this situation, a Megastudy official said, "We are undergoing a tax investigation today and will cooperate fully and sincerely." A Jongno Academy official stated, "The National Tax Service has been conducting a tax investigation since the morning, and it is unusual to carry out simultaneous tax investigations like this."

Earlier, on the 15th, President Yoon ordered Deputy Prime Minister and Minister of Education Lee Ju-ho to exclude so-called "killer questions" from the College Scholastic Ability Test (CSAT). The reason was that if questions not covered in the public education curriculum are included in the CSAT, students would inevitably have to rely on private education.

Along with this, the Presidential Office also warned of a firm response regarding the "private education cartel," stating, "If judicial measures are necessary, we can consider them." Based on President Yoon's directive, the private education industry had already anticipated that tax investigations could be conducted targeting large entrance exam academies or high-earning instructors.

Through this special tax investigation, the government appears to be closely examining whether there are any illegal or illicit aspects in the profit structure of the academy industry.

Meanwhile, separate from this investigation, the Ministry of Education has designated a two-week period starting from the 22nd as the "Intensive Reporting Period for Suspected Private Education Cartel and Corruption Cases" and is conducting crackdowns. A reporting center has been established to receive reports on suspected collusion between private education and the CSAT, forced textbook purchases, excessive tuition fees, false or exaggerated advertisements, and other complaints.

This content was produced with the assistance of AI translation services.