South Korea SNS market income surges amid tax collection challenges

The SNS market in South Korea has experienced rapid growth, with reported business income for SNS-based sellers rising from 1.73 billion won in 2020 to approximately 33.3 billion won in 2024. The number of registered businesses in this sector also increased more than sixfold during the same period, growing from 287 to 1,838.

Despite this expansion, tax authorities face significant challenges in monitoring revenue. Unlike traditional e-commerce platforms that record transactions through credit cards or cash receipts, many SNS sellers conduct business via direct messages (DMs) and private messengers, often settling payments through direct bank transfers. This method leaves little to no digital paper trail for tax collection.

The National Tax Service has acknowledged these limitations, noting that they currently rely heavily on individual reports of non-issuance of cash receipts. To address these blind spots, the agency plans to strengthen monitoring and promote reward programs for reporting tax non-compliance. Lawmaker Moon Jin-seok has called for a new data collection system tailored to these evolving transaction methods to ensure fairness for compliant taxpayers.