The 1st National Tax Administration Reform Committee Meeting of 2020
[Sejong=Asia Economy Reporter Kim Hyunjung] The National Tax Service (NTS) is accelerating digital tax administration using big data and cloud technology to ensure uninterrupted tax services and tax work even during emergencies such as COVID-19. In particular, it plans to establish a security system to enable employees to work remotely and from home, and expand AI-powered chatbot consultation services to areas such as capital gains tax and earned income and child tax credits.
The National Tax Administration Reform Committee held the "1st National Tax Administration Reform Committee Meeting of 2021" on the 26th at the Seoul Regional Tax Office, where these matters were discussed and announced. Established in 2013, the committee is a representative advisory body for tax administration consisting of experts from various fields, economic organizations, and exemplary taxpayers. The meeting was conducted as a general assembly with 12 main members including the deputy commissioner of the NTS and 12 subcommittee members participating both online and offline.
Following the committee’s discussions, the NTS decided to promote innovation in work methods using big data and cloud technology. First, it will create a mobile work environment that allows access to the tax administration network from outside during field inspections or tax audits. Considering childcare, health issues, and rotational work, it will support employees’ ability to work from home and establish a strengthened security system including three-step user authentication, firewalls, and intrusion detection.
In addition to automating manual tasks, the NTS plans to expand AI-based tax consultation. It has already reduced manual analysis time by automatically analyzing personal information and deposit reasons of accounts under false names to detect tax evasion suspicions. The 24-hour chatbot consultation service, which currently handles repetitive inquiries, will be expanded to cover earned income and child tax credits as well as capital gains tax, allowing staff to focus on tax base management. The AI chatbot service has been used for comprehensive income tax, value-added tax, and tax evasion reports, and was applied to year-end tax settlements starting January this year.
Furthermore, the NTS plans to develop an identification and residency determination model for foreigners using multiple taxpayer numbers to reduce the workload of verifying the appropriateness of capital gains tax and comprehensive income tax for foreigners. Big data analysis techniques will also be applied to detect tax evasion through indirect stock gifting among public interest corporations and related parties, which involves illicit wealth transfers.
The committee also discussed this year’s tax audit operation direction, focusing on reducing the number of audits to support economic recovery and assisting taxpayers facing difficulties such as those with sharp sales declines. The total number of audits will be maintained at around 14,000, similar to last year, focusing on regular audits with high taxpayer predictability. Simplified audits for small taxpayers will limit on-site audit periods to 50% of the total audit duration, and exclusion of tax verification for small-scale self-employed individuals will be extended until the end of this year. The exclusion criteria will be expanded to include self-employed individuals with significantly decreased sales.
Additionally, the NTS plans to strictly respond to tax evasion related to real estate transactions, emerging and booming industries such as leisure and home economy, and sectors closely related to public livelihood. It emphasized focusing efforts on blocking unfair and privileged tax evasion that involves corporate fund misuse, irregular capital transactions, and new offshore tax evasion schemes that appropriate private interests and illegitimately transfer wealth across generations.
Achievements in the first quarter of this year include initiating tax audits on 358 rental business operators who omitted income, 38 unfair tax evasion suspects such as young and rich individuals who increased assets through unfair privileges, and finalizing the criteria for expanding tax verification exclusion for self-employed individuals to those with a sales decrease of 20% or more, along with providing tax support. Additionally, the NTS plans to accelerate the establishment of a real-time income tracking system for nationwide employment insurance support by creating a new Income Data Management Preparation Team.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
