Last Year’s Loan Business Revenue 3.8 Trillion Won... Tax Burden Decreased by 13 Billion Won

Number of Private Loan Companies Increases by 75% in 5 Years... Measures Needed for Low-Income Financial Support

[Asia Economy Reporter Lee Kwang-ho] The number of new lending companies and their revenue have been rapidly increasing every year, indicating that the lending industry continues to thrive steadily regardless of the economic downturn caused by the novel coronavirus disease (COVID-19).

According to data submitted by the National Tax Service to Kim Doo-kwan, a member of the National Assembly's Planning and Finance Committee, the number of registered lending corporations in 2019 was 1,644, with 221 new registrations compared to 2018. Additionally, the revenue reported to the National Tax Service by these companies in 2019 reached 3.8058 trillion KRW, which is approximately 700 billion KRW higher than five years ago.

Notably, while the number of lending corporations and their revenue have increased annually, the taxes paid by these companies have decreased. In 2018, the lending industry reported revenue of 3.5564 trillion KRW and paid taxes amounting to 220.1 billion KRW. In 2019, although the industry reported revenue that was about 250 billion KRW higher than the previous year, the taxes paid amounted to only 207.6 billion KRW, representing a decrease of approximately 13 billion KRW compared to 2018.

Assemblyman Kim stated, "As the lending industry enjoys a boom, the household debt and high-interest burdens on ordinary citizens have intensified."

He added, "Recently, commercial banks have consecutively reduced loan limits and raised interest rates, raising concerns that ordinary citizens may increasingly rely on high-interest loans from lending companies. It is urgent to establish genuine financial services for ordinary citizens within the formal financial system to alleviate the burden of high interest rates."

Furthermore, he emphasized, "The National Tax Service should closely monitor whether the lending industry is engaging in illegal activities such as tax evasion and conduct strong surprise tax audits if necessary."

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