National Tax Service's Key Policy Plan Focuses on 'Reviving the People's Economy'
Maintaining Tax Audits Below 14,000 Cases, the 'Lowest Ever'
Automatic Extension of Payment Deadlines and Suspension of Seizure and Sale for Small Business Owners
The National Tax Service (NTS) has decided to reduce the burden of tax investigations on small and micro taxpayers this year to aid the recovery of the livelihood economy. However, it will focus its investigative capabilities on cracking down on lifestyle-related tax evasion activities that threaten the livelihood economy, such as illegal high-interest private loans, stock price manipulation, and multi-level marketing fraud.
The NTS announced the '2024 Major Policy Implementation Plan (National Tax Administration Operation Plan)' containing these details on the 13th.
Kim Chang-gi, Commissioner of the NTS, emphasized, "We have set the stabilization of the livelihood economy and the realization of a dynamic economy as this year's top priorities," adding, "We plan to focus on tax support and the realization of fair taxation as key tasks to achieve this."
Kim Chang-ki, Commissioner of the National Tax Service, is explaining the '2024 National Tax Service Major Policy Implementation Plan' at the Government Sejong Complex.
Reducing Investigation Burden on Micro Taxpayers and Full Response to Intentional Tax Evasion
Considering the high uncertainty of domestic and international conditions and the need to stabilize livelihoods, the NTS plans to operate the total number of investigations at 14,000 or fewer, similar to last year's 13,992 cases.
To this end, tax investigations on small and micro taxpayers will be refrained from in principle this year. First, micro self-employed individuals and small business owners will continue to be excluded from the regular investigation selection targets. Additionally, the pre-investigation notification target will be expanded from small and medium taxpayers to all taxpayers, and the notification period will be improved from 15 to 20 days.
Furthermore, a tax support package will be provided to small and medium enterprises and small business owners facing management difficulties. The automatic extension of the value-added tax (VAT) payment deadline by two months will also apply to corporate and income taxes with a three-month extension, and seizure and sale for temporary arrears will be deferred for up to one year. Refunds will be paid early. For micro-businesses and export companies, VAT and corporate tax refunds will be paid up to 20 days earlier than the statutory deadline.
Instead, turning the crisis of the common people into an opportunity, the NTS will concentrate investigative capabilities on lifestyle-related exploitative tax evasion that undermines livelihood stability and causes social problems, including ▲illegal private loans with murderous high interest rates and illegal collection using threats and violence exploiting vulnerable groups, ▲unfair capital market transactions such as stock price manipulation that disrupt market order and cause numerous victims, and ▲multi-level marketing fraud that guarantees excessive illegal profits and deceives consumers with false or exaggerated facts. In particular, illegal private finance will be met with a full-scale response through tax investigations, arrears and asset tracking, and cooperation with related agencies (prosecutors, police, Financial Supervisory Service) centered on a government-wide task force (TF).
Last year, the National Tax Service forcibly collected 600 million won worth of cash and precious metals from a delinquent taxpayer's residence.
On-site tracking of malicious tax delinquents will be strengthened, and business recovery for sincere taxpayers will be actively supported. To eradicate high-value and habitual tax delinquents, the NTS will discover various asset concealment methods used by delinquents through linked analysis and planned analysis of taxation data such as capital transactions among special related parties, sales data of luxury used cars, and patent transfer data, including new investment products and precious metals. Additionally, the NTS will strengthen on-site collection activities such as the tax office tracking task force expanded last year and joint raids by regional offices and tax offices, and will promote improvements in administrative sanctions such as public disclosure of names and travel bans. However, for livelihood-related arrears of businesses in food service, retail, lodging, construction, and manufacturing sectors experiencing sharp sales declines or cash shortages, seizure and sale deferral requests will be actively approved.
Providing Liquidity and Management Support to SoBuJang and Root Industry Companies
The NTS will add 12,000 companies in the materials, parts, equipment (SoBuJang), and root industry sectors to the 'future growth tax support' target to strengthen global technological competitiveness. These companies will receive 'liquidity support' such as payment deadline extensions, early refund payments, and priority processing of correction claims, as well as 'management support' including priority pre-review of research and development (R&D) tax credits and exemption from verification of reported contents.
Additionally, a new International Tax Response Team will be established to support the resolution of tax uncertainties for Korean companies following the first implementation of the system (January 1 this year). To support K-SUUL exports, the NTS will collaborate with the Korea Trade-Investment Promotion Agency (KOTRA) and overseas distribution chains to diversify export channels so that small and medium-sized liquor companies can directly target overseas consumers. The NTS also plans to improve regulations that limit the global competitiveness of Korean liquor, such as restrictions on Makgeolli additives, relaxation of warehouse area standards, and mandatory attachment of liquor transport stickers.
Enhancing Taxpayer Convenience for Stable Revenue Budget Procurement
The 2024 revenue budget under the jurisdiction of the NTS is 357.1 trillion won, which is 31 trillion won less than the 2023 revenue budget but 21.4 trillion won more than the 2023 actual results. The NTS expects the domestic economy to recover centered on semiconductors and exports but foresees persistent uncertainties such as delayed domestic demand improvement. Accordingly, the NTS will conduct monthly tax revenue situation review meetings to comprehensively reflect major economic indicators and taxpayer field conditions, monitor and manage tax revenue progress and contingencies, expand support for accurate tax filing including major tax items, and make multifaceted efforts to secure revenue budgets, including establishing systems to respond to high-value arrears and appeals.
The NTS will also focus its capabilities on expanding non-face-to-face filing services for taxpayer convenience. It will continuously expand the 'Pre-filled and All-filled' service, where the NTS automatically fills out tax return items for taxpayers to simply confirm and complete filing, and promote the advancement of mobile services, which currently offer simple tax information inquiry by replicating the PC-based Hometax interface.
The NTS will also implement an intelligent Hometax system using artificial intelligence (AI). First, it will enhance Hometax to provide a user experience equivalent to intuitive and easy-to-use private IT services such as Toss and KakaoBank, and revamp it into an AI search system that understands the meaning of input sentences to show taxpayers the desired results. In particular, generative AI consultation, which provides answers tailored to taxpayer questions by learning consultation data and tax laws, will be pilot introduced for comprehensive income tax filing in May.
Commissioner Kim said, "We will systematically manage key core tasks through the National Tax Administration Capacity Enhancement TF and promptly reflect various taxpayers' tax difficulties and suggestions in policies without omission," adding, "To ensure the public can feel the effects quickly, we will immediately disseminate these contents through the nationwide tax office chiefs meeting on the 15th and successfully complete this year's implementation tasks."
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