Changwon Special City, First Basic Local Government to Seize Four Major Insurance Refunds from Local Tax Delinquents

"Reducing the Burden on Struggling Delinquent Business Owners
and Addressing Long-Term Chronic Tax Arrears"

Changwon Special City in Gyeongnam will become the first local government to implement the seizure and collection of four major insurance refunds for corporations and individual business owners with local tax arrears of 300,000 won or more.

Changwon Special City Hall.

The four major insurance refunds include National Health Insurance, National Pension, Employment Insurance, and Industrial Accident Compensation Insurance. During the annual payment process, business owners may generate refundable insurance premiums due to overpayment, resignation, business closure, or adjustment of assessment data.

If these refunds are not claimed by the business owner within a certain period (five years for National Health and Pension Insurance, three years for Employment and Industrial Accident Insurance), the funds are reverted to the relevant public institution. However, in the case of business owners who have closed or suspended their businesses, many fail to claim these refunds, and they are often managed as long-term delinquent taxpayers.

In response, the city plans to proactively offset overdue taxes by seizing and collecting these refunds based on data provided by the relevant institutions, thereby also easing the burden on business owners.

The initiative targets 8,152 corporations and individual business owners with local tax arrears of 300,000 won or more, with the total amount of arrears reaching 55.382 billion won (including deferred amounts). This figure includes both currently operating businesses and those that have closed within the past five years.

Kim Changwoo, head of the Tax Division, stated, "For businesses that have gone bankrupt or closed down, it is often difficult to recover arrears using conventional collection methods due to a lack of payment capability or seizable assets. By utilizing unclaimed refunds, we expect to both reduce the burden on struggling business owners and effectively address long-term chronic tax arrears."