[2020 National Audit] National Tax Service Commissioner: "Strict Crackdown on Anti-Social Tax Evasion and Delinquency... Doing Our Best to Secure Revenue Budget"

[Asia Economy Reporter Kwangho Lee] Kim Daeji, Commissioner of the National Tax Service (NTS), stated on the 12th, "Considering the difficulties in the national economy, we will focus our efforts on supporting sincere tax reporting and do our best to secure the budget for our jurisdiction by maximizing voluntary tax payments."

Commissioner Kim made this remark during a work report at the National Assembly's Planning and Finance Committee audit held at the Government Sejong National Tax Service building on the same day.

According to the NTS, the cumulative tax revenue performance as of July was 164 trillion won, down 20 trillion won from the previous year's 184 trillion won, and the progress rate was 60.5%, a decrease of 4.2 percentage points from last year's 64.7%.

Commissioner Kim explained, "The main factors are the carryover of tax payments and tax reductions due to COVID-19 tax administration and tax support, decreased corporate operating performance in 2019, and sluggish domestic demand."

He added, "Although recovery from the economic downturn is expected through policy efforts such as revitalizing consumption and investment, uncertainties remain due to the resurgence of COVID-19."

Regarding future tax revenue management, Commissioner Kim said, "We will expand support for sincere reporting on major filings in the second half, such as value-added tax preliminary reports and interim payments of comprehensive income tax, to maximize voluntary tax payments. We will monitor tax revenue fluctuations due to COVID-19 trends and expand the tax infrastructure to block omitted and evaded taxes."

To this end, the NTS plans to focus investigative capabilities on deliberate tax evasion, covert tax evasion through real estate, and malicious high-amount habitual tax delinquencies, responding strictly.

Commissioner Kim emphasized, "We will strictly punish tax evasion activities that harm the livelihood of ordinary citizens, such as illegal loan sharks, and strengthen verification of emerging and booming distribution industries. In particular, for new industries based on online platforms, we will support their institutional establishment but respond strictly to evasion suspicions such as income dispersion using borrowed-name accounts."

He continued, "We will concentrate investigative efforts on intelligent tax evasion acts that go against a fair economy, such as unfair transactions abusing superior positions and illegitimate wealth inheritance through loopholes."

Commissioner Kim Jungchang also stated, "We will strongly eradicate covert tax evasion riding on the overheated real estate market. We will thoroughly verify and tax covert fund movements related to corporate and private equity fund acquisitions of multiple houses and high-priced apartment acquisitions by minors, and conduct detailed inspections of rental income omissions using relatives' names by high-priced multiple homeowners, false cost claims, and improper tax reductions by housing rental businesses."

Furthermore, he added, "Through big data analysis, we will conduct intensive follow-up investigations targeting high-amount habitual tax delinquents who have concealed assets through loopholes, and promote expanded cooperation with overseas tax authorities to eradicate intelligent delinquency evasion through hiding overseas assets."

In addition, the NTS plans to minimize tax burdens through prudent and restrained tax administration execution.

Commissioner Kim said, "We will actively implement the extended tax verification deferral and exclusion measures until the end of the year for self-employed and small business owners facing economic crises due to COVID-19. To allow taxpayers to focus on economic activities, we will drastically reduce the total number of tax audits from 16,008 cases last year to about 14,000 cases."

He also emphasized, "We will expand audit deferrals and selection exclusions for small and medium enterprises that have maintained employment or created jobs despite difficult business conditions, provide customized tax information to Korean New Deal and innovative SMEs, and pay export SME refunds as early as possible."

He concluded, "We will build a sustainable change and innovation infrastructure for national tax administration and create proactive administration and a healthy working environment that both the public and internal members can empathize with."