Posted : 2013-01-29 16:33
Updated : 2013-01-29 16:33

NTS to get special powers

By Kim Jae-won

The tax authority is all-out to bring the black market, estimated at 400 trillion won, to account.

The National Tax Service's (NTS) drive is being fueled by President-elect Park Geun-hye, who is sticking to her pledge not to raise income taxes, but needs funds to finance, among others, her welfare programs.

Already, the NTS will gain access to information from the Financial Services Commission's (FSC) financial intelligence unit (FIU) to track taxable income. Currently, FIU data may only be used for limited purposes such as investigating specific crimes and irregularities.

One high-ranking NTS official said that the availability of FIU data will dramatically improve the agency's ability to monitor transactions handled at financial companies.

''We are seeking to expand our organization by increasing the number of officials dedicated to finding areas where taxes should have been collected,'' he said.

''We sent more than 500 officials to our regional offices to aid the effort to collect taxes and investigate tax dodgers earlier this month. The strengthened workforce will mostly target big companies and high-income earners.''

Park made welfare-related promises during her presidential campaign, such as increasing state spending on childcare and public education, expanding health coverage for major diseases and introducing universal old-age pensions.

These are all part of Park's grand but largely unspecified scheme to increase the proportion of middle-class families to 70 percent of all households during her five-year presidency.

Park says her government will have to provide a financial jolt of 135 trillion won, or 27 trillion won per year.

Experts argue that raising that kind of money without increasing tax rates is pure fantasy.

Park's strategists at the governing Saenuri Party counter there is a chance, if the size of the country's underground economy is dramatically reduced.

Even if everything goes right for Park, it could be argued that her math is still flawed. Worsening global conditions have battered the country's export-dependent economy, which saw its growth in gross domestic product fall sharply in 2012. This has policymakers concerned that the slowdown will result in lesser tax revenue.

The government had expected to collect 216.4 trillion won in tax revenue this year, a forecast made when its annual growth target was still 4 percent. Now, with the growth target adjusted to 3 percent, expectations in tax revenue will have to come down as well.

The NTS plans to beef up monitoring of offshore tax dodging by businesses, vowing to clamp down on companies attempting to transfer their assets unlawfully to other countries to duck taxes.

The Korea Taxpayers' Federation, a civic group of taxpayers, said Monday that it opposes the NTS have full access to information of the FIU, worrying it will increase violation of taxpayers' privacy by the authorities.

  • 1. Korean-Nigerian model breaks through barriers
  • 2. Koreans join Women's March against new US president
  • 3. US asks Korea to arrest Ban Ki-moon's brother
  • 4. 2 Filipino cops arrested for murdering Korean
  • 5. Korea concerned about Trump's 'America first' policy
  • 6. Culture minister, ex-presidential chief of staff arrested over blacklist of 'left-leaning' artists
  • 7. Culture minister, ex-presidential chief of staff arrested over blacklist of 'left-leaning' artists
  • 8. Trump vows to reinforce alliances while putting 'America First'
  • 9. Homosexuality missing from sex education
  • 10. Samsung to announce cause of Galaxy Note 7 fiasco