Incheon City Seizes Income of Freelancers and Self-Employed in 'Tax Collection Blind Spot'

Utilizing National Tax Service Withholding Data
400 Million Won Collected from 873 Delinquent Taxpayers

On September 9, the Incheon city government announced that it had pioneered, for the first time in the country, a method for collecting overdue taxes from freelancers and other self-employed individuals who had previously fallen through the cracks of tax collection, successfully recovering 400 million won.

The city obtained income tax withholding data from the National Tax Service and used this information as the basis to seize the income of delinquent taxpayers. Previously, it was difficult to verify the income of self-employed individuals, making tax collection challenging even when taxes were overdue. However, the city noted that these individuals report their income to the National Tax Service through income tax withholding, and leveraged this fact.

Incheon City Hall

In the case of Doctor A, an oriental medicine practitioner who had accumulated 190 million won in unpaid taxes over four years, the city’s income seizure measure prompted an immediate payment of 40 million won. Doctor A also submitted a written pledge to pay the remaining overdue amount in monthly installments of 30 million won.

Used car salesperson B also paid 8 million won immediately after the city seized his income, out of a total overdue amount of 16 million won, and pledged to pay the remaining 8 million won in full next month.

Through its investigation of National Tax Service data, the city identified 873 delinquent taxpayers and, through seizure and pre-notification measures, has so far collected 400 million won in overdue taxes. Of these, 89 individuals with large overdue amounts of 5 million won or more had their income seized immediately, while the remaining 784 individuals will be encouraged to voluntarily pay by the end of this month.

An official from Incheon city stated, "For habitual and malicious tax delinquents who avoid taxes despite having the ability to pay, we will strengthen seizures through their income sources. We also plan to continuously manage and seize the income of freelancers and other self-employed individuals as part of our ongoing collection efforts."