Tax agency comes under criticism

By Park Hyong-ki

NTS chief Han Sung-hee / Yonhap

The National Tax Service (NTS) has publicly apologized for the first time ever for abusing its power and colluding with former governments to apply political pressure on certain companies through audits.

In a meeting on state tax reform in Seoul this week, NTS Commissioner Han Sung-hee acknowledged a report by an independent task force that said some of its past audits were conducted unfairly, and they were politically motivated.

Its acts have violated the NTS’ principle of maintaining fairness without being swayed by politics.

“As the commissioner, I am very sorry for these audits confirmed by the task force that said have damaged the NTS value for politically neutrality and fairness,” Han said.

The task force, which was formed last August, issued its first report early this week after an internal probe.

Some of the NTS’ tax audit cases were uncovered to have backed the former governments’ aim to solidify their political power.

The NTS’ audit of Taekwang Industrial in 2008 during the conservative Lee Myung-bak administration was really aimed at former liberal President Roh Moo-hyun. Former Taekwang chairman Park Yeon-cha was a life-long financial supporter of the late Roh, who committed a suicide during an investigation in May, 2009.

A number of cases were building against Roh by the investigative authorities to find out whether he received corporate bribes in return for granting favors.

Such tax audits and prosecution were widely interpreted, albeit not officially, as a politically motivated move.

The incoming administrations, whether liberal or conservative, had used whatever resources they had with agencies that held investigative authorities to drive and root out populism of their predecessors.

The targets normally included banks, manufacturers and broadcasters leading in their respective sectors.

The authorities had never before acknowledged its abuse of power.

As always, when things got hot in the probe, they said it was part of their regular conduct.

It remains to be seen whether NTS chief Han will keep his and the incumbent administration’s promise for a sweeping reform, and that anyone found guilty of overstepping their boundaries for political benefits will be held accountable.

Han was part of an audit team for Taekwang in 2008.

Critics claim that Han would eventually follow suit of his predecessors, who tended to make politically-motivated audits aimed at finding irregularities of political enemies of the administration.