109 Tax Evasion Offenders Exploiting COVID-19 Undergoing Tax Investigation

Illegal Loan Sharks, Entertainment Establishments, High-Rent Income Landlords, and Multi-Level Marketing, etc.

Im Gwang-hyun, Director of the National Tax Service Investigation Bureau, is announcing the tax investigation plan for 109 suspects involved in tax evasion harming the public on the 19th at the National Tax Service in the Government Sejong Complex.

[Asia Economy Reporter Kwangho Lee] The National Tax Service (NTS) has launched tax investigations targeting tax evaders who exploit the economic crisis caused by the novel coronavirus disease (COVID-19) to harm ordinary citizens.

On the 19th, the NTS announced that it has begun tax investigations on 109 suspects, including illegal moneylenders, entertainment establishments, high-rent income landlords, and multi-level marketing operators suspected of tax evasion.

The investigation targets include ▲ illegal moneylenders who lent funds at exorbitant interest rates to ordinary citizens and small business owners struggling financially due to COVID-19 ▲ high-rent income landlords who established real estate corporations to purchase commercial buildings and small office buildings in major commercial districts and evaded taxes by collecting high rents ▲ entertainment establishments and clubs operating under false names that promote luxury and indulgence ▲ adult game centers that stimulate gambling tendencies among economically vulnerable groups and evade taxes through illicit methods ▲ health supplement and medical device companies that exploit public anxiety about health by selling products at high prices through false or exaggerated advertisements and reap excessive profits ▲ multi-level marketing schemes that cunningly lure victims and embezzle sales proceeds ▲ and mutual aid societies that cause consumer harm through poor management of member contributions and low-cost services while evading taxes.

According to the Financial Supervisory Service, consultations and reports related to illegal moneylending increased by 840 cases (57%) to 2,313 cases from January to April this year compared to the previous year after COVID-19. Additionally, the Korea Consumer Agency reported that consumer consultations regarding health foods increased by 203 cases (19%) to 1,271 cases from February to March this year compared to the previous year.

The NTS plans to conduct rigorous investigations, applying criminal tax investigations as a principle for suspects involved in tax evasion through the use of borrowed-name accounts and double bookkeeping. In particular, for malicious tax evaders suspected of using false names and tampering with or destroying evidence, the NTS will cooperate with prosecutors to obtain search and seizure warrants and proceed with investigations intensively.

Furthermore, the NTS will simultaneously investigate the sources of funds related to the asset formation process of the suspects and their families. If concealed assets of business operators are discovered, the NTS will immediately implement provisional seizure before final assessment and continue thorough follow-up investigations.

The NTS stated, "We will continue to provide prompt tax support, such as deferring tax investigations, for taxpayers affected by COVID-19. On the other hand, we will not limit tax investigations to a one-time effort but will continuously conduct them on illegal moneylenders, gambling adult game centers, and high-rent income landlords who harm ordinary citizens by exploiting the economic crisis, to thoroughly recover evaded revenues."

This content was produced with the assistance of AI translation services.