By Lee Hyo-sik
Shinsegae Group, the retail-oriented family-controlled conglomerate, is ordered to pay nearly 200 billion won ($170 million) in back taxes for evading corporate income and gift taxes, according to the National Tax Service (NTS), Friday.
The agency fined Shinsegae affiliates, group Chairwoman Lee Myung-hee, Vice Chairman Chung Yong-jin and other controlling family members.
Of the 200 billion won, Chairwoman Lee was reportedly ordered to pay 70 billion won in back taxes for converting borrowed-named stocks in group units into her own equities. Lee did so on Nov. 6, when the NTS audit of Shinsegae Group, which began in May, was nearly completed.
Lee used to hold 379,733 shares of stock in E-Mart, Shinsegae Corp. and Shinsegae Food under the names of company executives and others. Based on the closing prices of the three stocks on Nov. 6, the shares were worth 82.7 billion won.
The chairwoman was ordered to pay about 80 percent of the equity value in gift taxes.
In addition, the agency slapped Shinsegae Engineering & Construction with 8 billion won fine for tax evasion.
Since taking power in early 2013, President Park Geun-hye has made a strong push to bring the underground, or shadow, economy into the open for taxation.
The NTS has been stepping up efforts to collect as much tax revenue as possible to support the government's costly welfare programs and other policies.
The agency aims to secure 210.1 trillion won in tax revenue for the year, up 7.4 percent from 195.7 trillion won in 2014.
Lee Hyo-sik is Finance Desk editor at The Korea Times. He manages finance-related stories on macroeconomics, banks, stocks, bonds, crypto etc. He is passionate about covering what's happening in Korea's financial industry and explaining it to both Korean and non-Korean readers. You can reach him at leehs@koreatimes.co.kr. Your insights and feedbacks are always appreciated.