By Yoon Ja-young
Staff Reporter
High-income self-employed, such as lawyers, doctors and bar owners, omit about half of their income in order to evade paying taxes. The tax agency should thoroughly reevaluate these tax loopholes as complaints are rising among wage earners that they are shouldering more tax burden than rich tax evaders.
The National Tax Service (NTS) conducted a series of tax probes from 2005 December to June this year, on 1,730 high-income self-employed that were suspected of tax evasion. The tax agency found that they omitted 2.4 trillion won when filing taxes. This indicates that they omitted around 50 percent of their income on average, each leaving out 1.4 billion won ($1.5 million) in income. The tax agency charged 512 million in taxes on these evaders, on average.
Professionals such as doctors and lawyers were omitting 42.8 percent of income in the first tax probe and self-employed operating facilities such as sports centers, wedding halls and restaurants were filing only 26 percent of their income.
The income omission rate, however, is on the decrease thanks to the use of credit cards and cash receipts. The tax agency has been promoting the use of credit cards and cash receipts, even providing income deductions at year-end.
The tax agency said it would continue tax probes on the self-employed suspected of tax evasion. Not only the tax evaders but also the tax accountants who abet tax evasion will be punished, it said. Currently, it is looking into 259 high-income self-employed, ranging from plastic surgeons, dentists and dermatologists to owners of saunas, galleries and cram schools.
Salaried workers, meanwhile, are shouldering more income tax than before. They paid 1.6 million won in earned income tax in 2005, up 56 percent from 2000.