By Jane Han
Staff Reporter
The nation's tax chief turned down business executives' joint request Friday to roll back the number of tax inspections amid a recent spike in audits targeting both public and private companies.
``It's true that we've increased our audits lately, but we're only getting back on schedule,'' Baek Yong-ho, the commissioner of the National Tax Service (NTS), said in a meeting with members of the Korea Chamber of Commerce & Industry (KCCI).
The NTS has postponed regular inspections into most companies since last October as part of its measure to help businesses struggling from the global financial crisis.
But recently, the tax authority has kicked off a series of audits into public firms, including the Korea Export Insurance Corporation and Korea Asset Management Corporation.
It also reportedly launched inspections into the nation's top builders, sending a warning to other industries.
Some critics have said that the NTS has been trying to increase tax collection to make up for possible cash shortages from deducted property taxes under the Lee Myung-bak administration.
Baek fended off these claims.
``It is unthinkable to add pressure on companies with a purpose to bring in a certain amount of money,'' said the chief, who stressed that the sudden increase in audit frequency is misleading the public.
About 0.7 to 0.8 percent of all Korean businesses are subject to a tax audit this year, which is lower than the 1.5-percent level in the mid-2000s, said Baek, adding that up to 5 percent of all Japanese companies are audited every year.
Some 40 KCCI members, including Samsung Electronics Vice Chairman Lee Yoon-woo and LG International Vice Chairman Koo Bon-joon, called for the NTS to reduce the audit frequency from once every four years to once every five years.
The tax chief declined the request, stating that companies should not perceive audits as a hindrance to their business operations.
``A healthy inspection system helps clear public mistrust against businesses,'' said Baek.