National Tax Service, 37 Trillion Won in Delinquent Taxes Effectively Written Off Over 5 Years

[Asia Economy Reporter Ryu Tae-min] It has been revealed that the amount of tax arrears that the National Tax Service (NTS) has effectively given up on collecting reached 37 trillion won over five years. This amounts to an average of about 7 trillion won per year.

According to data received by Rep. Yoon Chang-hyun of the People Power Party from the NTS for the National Assembly audit on the 18th, the total amount of tax arrears classified as 'collection suspension' by the NTS from 2017 to 2021 was 36.7803 trillion won. Collection suspension arrears refer to amounts that are practically difficult to collect, such as cases where the debtor has no assets, the debtor is missing, or forced collection was attempted but insufficient. The total arrears amount is around 20 trillion won annually.

The NTS manages the 'collection target arrears' by subtracting the amount of tax cancellations from the arrears carried over from the previous year and those incurred in the current year.

The collection target arrears were 27.9128 trillion won in 2022, 27.1866 trillion won in 2020, 28.9382 trillion won in 2019, 27.5079 trillion won in 2018, and 26.1304 trillion won in 2017. Over five years, the NTS settled 90.1641 trillion won of these arrears, of which 59.2%, or 53.3838 trillion won, was settled in cash, and the remaining 40.8% was decided as collection suspension.

It was also found that the collection rate for arrears entrusted to Korea Asset Management Corporation (KAMCO) by the NTS was not high.

Last year, the net entrusted amount for arrears collection by KAMCO was 6.3267 trillion won, of which the collected amount was 43.52 billion won, resulting in a collection rate of 0.69%. The collection rates were 0.65% in 2020, 0.68% in 2019, 0.64% in 2018, and 0.65% in 2017, remaining below 1% annually over the past five years.

The NTS's performance in tracking and investigating assets of high-value tax delinquents is improving. Last year, through asset tracking investigations of high-value tax delinquents, the NTS collected a total of 2.5564 trillion won, including 1.5709 trillion won in cash collections and 985.5 billion won through seizures and other measures.

The amount collected and seized through asset tracking investigations of high-value tax delinquents increased from 1.7894 trillion won in 2017 to 1.8805 trillion won in 2018, surpassing 2 trillion won at 2.0268 trillion won in 2019. It further increased to 2.4007 trillion won in 2020 and rose even more in 2021.

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