Seoul City Seizes 'Deposit Money' from High-Value Tax Delinquents in Prison... 225 Notified of Seizure

225 High-Value Tax Delinquents Imprisoned Despite Ability to Pay Taxes, Excluding Those in Livelihood Cases
Seized Funds per Inmate Immediately Applied to Outstanding Taxes, Work Incentives and Labor Compensation Collected Upon Release

[Asia Economy Reporter Lim Cheol-young] The Seoul Metropolitan Government will seize the detention allowances of 225 high-amount tax delinquents, each owing more than 10 million won, who are currently incarcerated in correctional facilities such as prisons and detention centers, for the first time.

On the 2nd, Seoul announced that it notified the 45 correctional institutions at the end of last month about the seizure of detention allowances, work incentives, and labor compensation for 225 high-amount tax delinquents owing more than 10 million won who are incarcerated there. This is the first time Seoul has attempted to seize detention allowances related to tax claims.

Seoul selected 225 individuals from a total of 304 high-amount tax delinquents nationwide who are incarcerated in correctional facilities, excluding those who are paying taxes in installments or are delinquent due to livelihood reasons. The group includes socially prominent figures who, despite having the capacity to pay taxes by owning high-value real estate under their own or family members’ names, delayed payment and committed various crimes leading to their incarceration. The total amount owed by these 225 delinquents reaches 41.7 billion won.

Seoul explained that the seizure of detention allowances was carried out to sound a warning to delinquents who believe they can evade tax obligations by being incarcerated in correctional facilities. In a survey conducted on July among 1,000 Seoul citizens, 88.2% responded that “strong administrative sanctions against tax delinquents are necessary.”

Notably, this seizure of detention allowances also has the effect of suspending the “statute of limitations on tax collection rights,” which lasts for five years from the date the tax was delinquent. Collection activities can continue uninterrupted during the incarceration period, thereby extending the statute of limitations. Without seizure, if a delinquent is incarcerated in a correctional facility such as a prison for more than five years, collection activities like home searches cannot be conducted, and the collection rights inevitably expire after five years.

Following Seoul’s seizure notification, the detention allowances seized from each inmate will be immediately collected from the correctional facilities and applied to the delinquent taxes owed to Seoul. Work incentives and labor compensation paid to inmates during their incarceration will also be sent from the correctional facilities to Seoul upon their release.

Seoul plans to regularly manage the detention allowances seized from delinquent inmates in correctional facilities. If there are signs of asset concealment or evasion of tax collection measures, additional investigations into detention allowance transaction details will be conducted. If any suspicions are found, the case will be converted into a criminal offense, and interrogations, seizures, and searches will be carried out targeting the delinquent and related parties. Furthermore, considering each inmate’s reasons for delinquency, living conditions, family, and expressed willingness to pay in the future, Seoul will also consider suspending collection of detention allowances.

Seoul has continuously introduced various methods to enhance the effectiveness of collecting from high-amount tax delinquents. It was the first local government to seize virtual currencies of high-amount delinquents, followed by seizing hidden assets exchanged into cashier’s checks, and now it is seizing detention allowances of incarcerated high-amount delinquents to ensure tax collection.

Lee Byung-han, Director of the Seoul Metropolitan Government’s Finance Bureau, said, “By seizing the detention allowances of high-amount tax delinquents incarcerated in correctional facilities, we expect to sound a warning to unscrupulous delinquents who evade taxes, commit crimes causing great social harm, and live comfortably in prison without remorse. We aim to realize tax justice by demonstrating that the ‘duty to pay taxes’ stipulated in Article 38 of the Constitution cannot be avoided anywhere.”

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