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| The National Tax Service's main office in Seoul / Korea Times file |
The National Tax Service (NTS) said Thursday it has launched audits of 95 wealthy people suspected of dodging taxes.
The tax agency will file a criminal complaint against those who failed to pay the amount of taxes due based on their incomes and assets.
The findings may be referred to the Fair Trade Commission (FTC) or prosecution if they are found to have engaged in embezzlement, accounting fraud or breach of trust as well as activities that undermine the principles of fair competition.
The move is part of efforts to identify individuals and their families with high incomes or assets including property, stocks or high-priced valuables.
They have managed to avoid the tax authorities' scrutiny mainly because efforts thus far have been devoted to identifying irregularities involving "chaebol," or family-run conglomerates.
Of the total, 37 are operators of mid-sized enterprises, and 10 are owners of expensive properties including those with high income derived from monthly rent.
The remaining 48 are professionals with a regular source of high income.
They hold a combined 12.6 trillion won ($11.1 billion) in assets, meaning each had about 133 billion won per person. On average, each had 104 billion won in stocks and 23 billion won in property.
Forty-one had assets between 10 billion won and 30 billion won, while 25 had between 30 billion won and 100 billion won.
Fourteen had between 100 billion won and 300 billion won and eight had between 300 billion won and 500 billion won.
Seven people had over 500 billion won.
By profession, about a third, or 31, worked in manufacturing, 25 in construction, 13 in wholesale, 13 in services, 10 in property and three in the medical sector.
The tax agency said it focused on firms engaging in sophisticated forms of accounting irregularities.
For example, an owner of a mid-sized firm transferred a large amount of cash under the pretext of investment with its overseas corporate entity with capital impairment.
The person later reported the amount in tax filings as deductible expenses, while spending the corporate funds on purchasing valuables, overseas property, living and education expenses for their children's overseas study.
Some of them paid their relatives a high salary by giving them senior positions at the firm while they had not worked for the position at all.
In another case, a company owner, who registered himself as the holder of a patent obtained by the firm, made a high income by selling it back to the company.
Some others inflated raw material and construction costs in a deliberate attempt to underreport income.
"We will continue to crack down on those who undermine the principle of fair taxation demoralizing the regular tax-paying hard-working people," a NTS official said.
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