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Gov't to detain tax dodgers up to 30 days
Main gate of the National Assembly
By Lee Kyung-min
By Lee Kyung-min
People who owe 200 million won ($169,000) in taxes and fail to pay them for more than a year despite three verbal warnings could be detained for up to 30 days, following the passage of revisions to tax laws, the economy ministry said Sunday
According to the Ministry of Economy and Finance, under one revision, suspected tax dodgers will be detained if a court issues a warrant sought by the prosecution following the recommendation of a related non-standing Assembly committee.
The change is part of 18 revisions made to tax-related laws that were passed by the National Assembly Economy and Finance Committee, Saturday.
If passed at the National Assembly's December plenary session, the law will take effect Jan. 1, 2020.
“The measure is expected to have greater efficacy compared to publicly disclosing their names,” a ministry official said. “This will help us collect taxes more effectively.”
The move comes amid a public outcry demanding harsh punishment for tax dodgers.
According to National Tax Service data submitted to the ruling Democratic Party of Korea during its annual parliamentary audit in October, the number of people with at least 200 million won in unpaid taxes stood at 7,158 in 2018. They failed to pay a combined 5.24 trillion won.
Suspected dodgers, however, will be given time to clarify their personal circumstances, while a legal framework will be set up to prevent them from being detained repeatedly for the same offense, a measure to prevent a human rights violation.
Another revision will subject corporate executives to a heavier tax on their severance pay as more of it will be reclassified as earned income, rather than retirement payments.
Usually, the tax on severance pay is heavier on earned income compared to retirement income.
A tax deduction of 30 percent will be given on total annual payments made using the Seoul Metropolitan Government's Zero Pay system, a mobile QR code-based payment method.
This is a setback for Seoul, given it had sought 40 percent to encourage more people to use the new system.
Thirty percent is the same maximum deduction granted to debit card users. Credit card users get only up to 15 percent.
Tax benefits will also shrink for people making money from renting out multiple homes.
To date, they have been able to pay up to 30 percent less in income tax on homes smaller than 85 square meters, or those valued at less than 600 million won, for four years. The tax was up to 75 percent less if they had been renting for more than eight years.
But the maximum tax deduction will be to 20 percent for those who rent houses out for over four years, and 50 percent for those that do so over eight years.