By Choi Kyong-ae
The National Tax Service said Tuesday it will seek revisions to laws to more effectively collect back taxes from the increasing numbers of tax evaders.
"We have been in talks with the Financial Services Commission (FSC) to adopt stricter rules in tracing hidden assets of tax evaders at home and abroad," Jeong Kyoung-cheol, an official at the NTS' Tax Collection Division, told The Korea Times.
"We want an extensive and intensive crackdown on tax evaders as well as their families and those who are suspected of helping the evaders hide their assets."
The FSC, which has the main say about tax law revisions, initially balked at the proposed revisions due to a potential breach of privacy. But the financial regulator is now considering changing the laws for the benefit of all taxpayers, the official explained.
From January 2012 to April 2014, the government collected 1.078 trillion won ($1 billion) in cash and 1.407 trillion won in seized property from delinquent taxpayers, according to NTS data.
Under the current real-name financial transaction laws, the government has full access to assets of those who default on their taxes. But it does not have the right to look into financial transactions between the defaulters and their families and relatives, the NTS said.
This contrasts with advanced countries such as the United States and Japan.
In the U.S., families or related people of delinquent taxpayers are often ordered to submit their financial transaction records to the authorities. They are also questioned about any attempts to help hide the delinquents' assets, Park Jong-soo who teaches laws at Korea University, said at a forum in Yeouido.
"The U.S. regulator has the right to demand financial transaction records of tax delinquents and their related people from banks and other financial institutions," Park said.
In its global drive to collect taxes from evaders, the U.S. introduced the Foreign Account Tax Compliance Act (FATCA) in 2010 to seek cooperation from countries. As of July, 101 countries, including Korea, have signed the FATCA contract.
Under the deal, Korea is required to offer all financial transaction data of U.S. citizens in its own territory to the U.S. government. If financial companies in Korea do not offer the data, they have to pay 30 percent of their income earned in the U.S. as a penalty.
Park and officials at the NTS said there should be changes to the existing tax laws as the government is benchmarking the U.S. system.
"There is a need to put those who do not pay their taxes for years or have high wealth but pay little tax under arrest. It may seem an excessive approach, but it is an inevitable move to boost the rights of general taxpayers," Park said.
The National Tax Service said Tuesday it will seek revisions to laws to more effectively collect back taxes from the increasing numbers of tax evaders.
"We have been in talks with the Financial Services Commission (FSC) to adopt stricter rules in tracing hidden assets of tax evaders at home and abroad," Jeong Kyoung-cheol, an official at the NTS' Tax Collection Division, told The Korea Times.
"We want an extensive and intensive crackdown on tax evaders as well as their families and those who are suspected of helping the evaders hide their assets."
The FSC, which has the main say about tax law revisions, initially balked at the proposed revisions due to a potential breach of privacy. But the financial regulator is now considering changing the laws for the benefit of all taxpayers, the official explained.
From January 2012 to April 2014, the government collected 1.078 trillion won ($1 billion) in cash and 1.407 trillion won in seized property from delinquent taxpayers, according to NTS data.
Under the current real-name financial transaction laws, the government has full access to assets of those who default on their taxes. But it does not have the right to look into financial transactions between the defaulters and their families and relatives, the NTS said.
This contrasts with advanced countries such as the United States and Japan.
In the U.S., families or related people of delinquent taxpayers are often ordered to submit their financial transaction records to the authorities. They are also questioned about any attempts to help hide the delinquents' assets, Park Jong-soo who teaches laws at Korea University, said at a forum in Yeouido.
"The U.S. regulator has the right to demand financial transaction records of tax delinquents and their related people from banks and other financial institutions," Park said.
In its global drive to collect taxes from evaders, the U.S. introduced the Foreign Account Tax Compliance Act (FATCA) in 2010 to seek cooperation from countries. As of July, 101 countries, including Korea, have signed the FATCA contract.
Under the deal, Korea is required to offer all financial transaction data of U.S. citizens in its own territory to the U.S. government. If financial companies in Korea do not offer the data, they have to pay 30 percent of their income earned in the U.S. as a penalty.
Park and officials at the NTS said there should be changes to the existing tax laws as the government is benchmarking the U.S. system.
"There is a need to put those who do not pay their taxes for years or have high wealth but pay little tax under arrest. It may seem an excessive approach, but it is an inevitable move to boost the rights of general taxpayers," Park said.
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