German minister calls for tackling tax evasion

Norbert Walter-Borjans, minister of North Rhine-Westphalia State

By Kang Hyun-kyung

A German minister from the North Rhine-Westphalia state said Thursday that preventing tax evasion and searching for additional tax sources are equally important for governments.

During a press meeting at the Plaza Hotel in Seoul, Minister Norbert Walter-Borjans encouraged governments to put greater effort into discouraging tax evasion before looking for additional tax sources.

He noted that tax evasion is a serious issue because good taxpayers suffer when greedy people hide their wealth and income in order to get out of paying taxes.

Like Korea, he said, most industrialized countries are now dealing with mounting calls to provide a wider social safety net.

“These nations are also asked to fight against the widening income disparity between high- and low-income earners. This is a natural thing,” he said. “Policy measures to fix problems like this will require the government to spend more, and this will consequently generate a debate regarding how to increase the government’s tax revenue. I think that now is the time for all governments to think deeply about forward-looking tax policies.”

Walter-Borjans arrived in Seoul Wednesday for a meeting with Korean officials from the National Tax Service, the Bank of Korea and other organizations to exchange ideas about the e-tax system and other tax-related issues.

The German minister said a heated debate over taxation is underway in his country.

Germany adopted a progressive taxation system, he said, where people earning higher income are required to pay more taxes than those who earn less. “One survey found most Germans feel that they pay higher taxes than needed. The lesson that we can draw from this opinion poll is that the government needs to present clear criteria to taxpayers when levying taxes,” Walter-Borjans said.

The German minister emphasized the need for close monitoring on how taxes have been spent is as important as imposing taxes.