[2023 National Audit] Government's Uncollected and Disappeared 'Unpaid Deficit' Amounts to 20 Trillion Won Over 5 Years

It has been revealed that the amount of unpaid taxes that could not be collected from tax delinquents reached 20 trillion won over the past five years.

According to the 'Status of Uncollectible Losses by Government Departments' received by Jin Sun-mi, a member of the National Assembly's Planning and Finance Committee from the Ministry of Economy and Finance on the 10th, the total uncollectible losses incurred over five years from 2018 to last year amounted to 20.5 trillion won. This means that an average of over 4 trillion won in uncollectible losses occurred annually.

Uncollectible losses refer to the amount of delinquent taxes that have been written off due to reasons making collection impossible. Reasons for uncollectible losses include corporate liquidation due to business closure, expiration of the statute of limitations, termination of compulsory collection, and inability to pay due to lack of assets.

Among the government's uncollectible losses last year, the major contributing departments were the Ministry of Economy and Finance (1.8 trillion won) and the National Tax Service (310 billion won). The combined uncollectible losses of these two departments accounted for 96.4% of the total. Most of the uncollectible losses incurred over the past five years were due to 'expiration of the statute of limitations' and 'termination of compulsory collection.' More than 90% of the uncollectible losses each year were caused by these two reasons.

On the 19th, officials are supplying Chuseok currency at the Bank of Korea Currency Receiving Center in Jung-gu, Seoul. Photo by Joint Press Corps

The amount of unpaid taxes that have not been written off as uncollectible is also rapidly increasing. Last year, the government's unpaid amount was 67.4 trillion won, an increase of 1.9179 trillion won compared to 2018. The scale of unpaid amounts was 48.4065 trillion won in 2018, 51.0491 trillion won in 2019, 54.3772 trillion won in 2020, and 61.3929 trillion won in 2021.

By department, last year the Ministry of Economy and Finance had the largest unpaid amount at 56.745 trillion won, followed by the National Tax Service and the Ministry of Land, Infrastructure and Transport with unpaid amounts of 4.1936 trillion won and 1.4679 trillion won, respectively.

Assembly member Jin Sun-mi said, "Effective improvement of the government's collection methods is necessary regarding the enormous scale of uncollectible losses and unpaid amounts," adding, "The related systems must be thoroughly re-examined to fulfill the tax authorities' fundamental role."