Bill Proposes Raising Whistleblower Reward Cap to 10 Billion Won
U.S. Pays Up to 30% of Collected Taxes as Incentive
On August 28, Eunsuk Choi, a member of the People Power Party (representing Daegu Dong-gu and Gunwi-gun Gap), sponsored the amendment to the National Tax Basic Act, which proposes raising the cap on tax evasion whistleblower rewards from 4 billion won to 10 billion won.
The current law allows for a maximum reward of 4 billion won to individuals who provide crucial information for assessing taxes that have been evaded or improperly refunded or deducted. However, this cap has not been adjusted even once since 2018, and critics have consistently pointed out that this limitation hampers the effective detection of increasingly sophisticated and covert tax evasion schemes.
According to data submitted to Eunsuk Choi’s office by the National Tax Service, the number of tax evasion reports actually received fell from 20,798 in 2021 to 18,928 in 2024, a decrease of 1,870 cases. The amount of taxes imposed through these reports also dropped sharply from 1.0223 trillion won in 2021 to 532.2 billion won in 2024, nearly halving over the same period.
Most notably, over the past five years (2021 to June 2025), the proportion of rewards paid relative to the amount of taxes imposed through whistleblower reports was only 2.0%. The average reward paid per case was just 41.04 million won, indicating that the current system has failed to sufficiently achieve its primary goal of encouraging active reporting. Therefore, it is urgent to improve the system by raising the reward cap to ensure that whistleblowers receive compensation commensurate with the risks they take.
This is significantly lower than the reward system operated by the U.S. Internal Revenue Service (IRS), which pays 15% to 30% of the amount collected through tax evasion reports as a reward. This incentive structure has been a key driver in uncovering large-scale and high-value tax evasion. In contrast, the Korean system offers insufficient compensation for the risks faced by whistleblowers, resulting in a structural limitation that undermines the effectiveness of efforts to eradicate tax evasion.
The proposed amendment aims to raise the tax evasion whistleblower reward cap from 4 billion won to 10 billion won, thereby institutionally supporting increased reporting activity, expanding tax revenue, and ultimately establishing tax justice.
Eunsuk Choi emphasized, "The core of the reward system is providing adequate compensation for the risks involved. If the reward is too low compared to the amount of taxes imposed, it is impossible to attract reports that can meaningfully contribute to uncovering tax evasion, as the compensation is far from sufficient for the risks whistleblowers take. On the other hand, if adequate rewards are guaranteed, citizens can report with confidence, which in turn leads to increased tax revenue and the realization of tax justice."
Choi also stated, "As tax evasion methods become more sophisticated, institutional responses must also be strengthened. By raising the reward cap to a realistic level, I will ensure that taxes paid fairly by citizens are used justly, and that those who illegally evade taxes are held accountable. I will take the lead in building a society where honest taxpayers are not disadvantaged and a fair tax order is maintained."
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