Innovative tax administration provides big data oriented support
By Mun Hee-chul
The COVID-19 pandemic has been sending shockwaves through the world's economy. The economic situation has been exacerbated as countries' travel restrictions have led to decreased production and consumption, a slowdown in global economic growth and trade, and a decline in employment.
In Korea, economic activity and consumer sentiment were severely hit by the pandemic, driving down small business owners' and mom-and-pop stores' profits. Their very survival has been questioned.
In response, the National Tax Service (NTS) has taken every applicable tax measure to support taxpayers hurt by COVID-19.
As of the end of September, the support through efforts such as the extension of due dates and deferment of tax collection amounted to 26.3 trillion won ($23.7 billion) across 6,037,000 cases ― the most extensive tax administration support in history.
In other words, it was a 15.8-fold increase from the last three-year annual average number of cases where support was provided, as well as a 3.7-fold increase from the support amount over the same period.
As part of active administration, the latest tax measures included all possible action alleviating the financial pressures caused by the pandemic. Thanks to this, business owners were given breathing space.
With a perception that the economy is in imminent danger amid the COVID-19 crisis, the NTS has diversified measures to overcome the pandemic since it established a COVID-19 Taskforce dedicated to providing tax administration support measures in February through the NTS headquarters, seven regional offices and 128 district offices.
For food and accommodation service providers affected by the crisis, the NTS eased the financial burden by extending filing and due dates for major tax items (including the due date for the payment of national tax bills) up to nine months and the execution of dispositions for taxes in arrears by up to 12 months.
In particular, through its official authority, the NTS extended filing and due dates for every taxpayer with income from overseas and deferred the execution of dispositions for arrears, such as the seizure of property or the sale of seized property, for small business owners and mom-and-pop stores with less than 5 million won in arrears. All this has been well received by taxpayers under cash-flow pressure.
On top of that, the NTS provided tax refunds for year-end settlements of earned income and value-added tax 10 days earlier than the legal period and expedited the process of dealing with correction claims (from two months to one) to pay out tax refunds more promptly. These measures achieved the effect of providing financial aid for business owners.
Also, the NTS held off on all tax audits targeting taxpayers who suffered losses as a result of the pandemic. We have deferred or halted ongoing tax audits to relieve pressure on taxpayers after accepting requests from small and medium enterprises (SMEs) regarding such audits, which allows them to concentrate on the recovery process.
Meanwhile, as the pandemic spurs environmental change around tax administration, along with the expansion of contactless culture and the acceleration of the Fourth Industrial Revolution, one of the biggest challenges facing us is to develop innovative tax support strategies in response to the change.
In this sense, the NTS started looking for taxpayers with imminent cash-flow issues through big data analysis and provided notification proactively. The notification service was offered for final returns on value-added tax in July for the first time, and taxpayers welcomed the move amid the COVID-19 crisis.
Taxpayers can learn how to obtain tax administration support anywhere, anytime, with the service's chatbot help feature on the official NTS website. Once a taxpayer enters a set of words like "tax administration support," the computerized system analyzes them, considers the intention of the taxpayer's question and gives the best possible answers.
Various countries have applauded Korea for its "K-quarantine model" to control and prevent COVID-19 and manage risk. I hope our comprehensive, prompt tax administration support program will grow to garner a global reputation as an inspiring policy model for troubled taxpayers in the time of COVID-19.
The writer is the NTS vice commissioner.
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| Mun Hee-chul |
By Mun Hee-chul
The COVID-19 pandemic has been sending shockwaves through the world's economy. The economic situation has been exacerbated as countries' travel restrictions have led to decreased production and consumption, a slowdown in global economic growth and trade, and a decline in employment.
In Korea, economic activity and consumer sentiment were severely hit by the pandemic, driving down small business owners' and mom-and-pop stores' profits. Their very survival has been questioned.
In response, the National Tax Service (NTS) has taken every applicable tax measure to support taxpayers hurt by COVID-19.
As of the end of September, the support through efforts such as the extension of due dates and deferment of tax collection amounted to 26.3 trillion won ($23.7 billion) across 6,037,000 cases ― the most extensive tax administration support in history.
In other words, it was a 15.8-fold increase from the last three-year annual average number of cases where support was provided, as well as a 3.7-fold increase from the support amount over the same period.
As part of active administration, the latest tax measures included all possible action alleviating the financial pressures caused by the pandemic. Thanks to this, business owners were given breathing space.
With a perception that the economy is in imminent danger amid the COVID-19 crisis, the NTS has diversified measures to overcome the pandemic since it established a COVID-19 Taskforce dedicated to providing tax administration support measures in February through the NTS headquarters, seven regional offices and 128 district offices.
For food and accommodation service providers affected by the crisis, the NTS eased the financial burden by extending filing and due dates for major tax items (including the due date for the payment of national tax bills) up to nine months and the execution of dispositions for taxes in arrears by up to 12 months.
In particular, through its official authority, the NTS extended filing and due dates for every taxpayer with income from overseas and deferred the execution of dispositions for arrears, such as the seizure of property or the sale of seized property, for small business owners and mom-and-pop stores with less than 5 million won in arrears. All this has been well received by taxpayers under cash-flow pressure.
On top of that, the NTS provided tax refunds for year-end settlements of earned income and value-added tax 10 days earlier than the legal period and expedited the process of dealing with correction claims (from two months to one) to pay out tax refunds more promptly. These measures achieved the effect of providing financial aid for business owners.
Also, the NTS held off on all tax audits targeting taxpayers who suffered losses as a result of the pandemic. We have deferred or halted ongoing tax audits to relieve pressure on taxpayers after accepting requests from small and medium enterprises (SMEs) regarding such audits, which allows them to concentrate on the recovery process.
Meanwhile, as the pandemic spurs environmental change around tax administration, along with the expansion of contactless culture and the acceleration of the Fourth Industrial Revolution, one of the biggest challenges facing us is to develop innovative tax support strategies in response to the change.
In this sense, the NTS started looking for taxpayers with imminent cash-flow issues through big data analysis and provided notification proactively. The notification service was offered for final returns on value-added tax in July for the first time, and taxpayers welcomed the move amid the COVID-19 crisis.
Taxpayers can learn how to obtain tax administration support anywhere, anytime, with the service's chatbot help feature on the official NTS website. Once a taxpayer enters a set of words like "tax administration support," the computerized system analyzes them, considers the intention of the taxpayer's question and gives the best possible answers.
Various countries have applauded Korea for its "K-quarantine model" to control and prevent COVID-19 and manage risk. I hope our comprehensive, prompt tax administration support program will grow to garner a global reputation as an inspiring policy model for troubled taxpayers in the time of COVID-19.
The writer is the NTS vice commissioner.
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