"Taking 9000% Interest and Unreported"… National Tax Service Launches Tax Investigation into Illegal Loan Sharks

75 Individuals Including High-Priced Academy, Expensive Food and Accommodation Business Operators Targeted

The National Tax Service (NTS) has launched a rigorous tax investigation targeting illegal high-interest and unregistered loan operators who charged interest rates as high as 9,000% annually without reporting them, as well as academy operators who induced payment of high special lecture fees and textbook costs in cash and failed to report these transactions.

On the 6th, the NTS announced that it has begun tax investigations on 75 livelihood tax evaders who have unfairly profited from high-interest loans and high prices targeting ordinary citizens struggling amid a complex economic crisis, or who have benefited from new and renewable energy policies but failed to pay taxes as required by law.

Oh Hoseon, Director of the NTS Investigation Bureau, stated, "Some business operators are ignoring the hardships of ordinary people and their tax obligations, damaging the values of fairness and compliance, which are the foundation of growth and integration, through excessive private gain and malicious tax evasion." He added, "We have launched intensive tax investigations targeting loan operators, academy business operators, food, lodging, and leisure business operators, as well as power generation and equipment operators who infringe on the livelihood economy."

The subjects of this investigation fall into four categories: ▲ 20 high-interest and unregistered loan operators ▲ 10 academy business operators who collected high tuition fees ▲ 25 food, lodging, entertainment, and leisure business operators who engaged in profiteering ▲ 20 power generation operators who received false tax invoices.

According to the NTS, Company A, a loan corporation, lent funds to small business operators using real estate as collateral and collected interest rates higher than the legal maximum rate (20%) without reporting the interest income. They established disguised corporations under the spouse’s name to distribute interest income and paid high wages to children who did not actually work. Additionally, they engaged in covert gifting by transferring luxury apartments worth billions of won, acquired under the corporation’s name, to their children at low prices. The income concealed through these methods was used to acquire high-value real estate and enjoy a luxurious lifestyle.

Academy business operators and instructors in entrance exam and vocational education received high special lecture fees and textbook costs in cash in addition to regular tuition fees and failed to report these incomes.

Also included in this tax investigation are lodging businesses such as pool villas that induced cash payments for high lodging fees under discount conditions and failed to report cash income; franchise headquarters that received franchise fees, interior construction payments, and equipment purchase costs from franchisees without issuing tax invoices; and power generation equipment operators who inflated expenses by receiving false tax invoices from business partners.

Director Oh said, "We will utilize all available tax investigation methods to verify illegal activities such as nominee accounts and destruction of books, as well as tax evasion." He added, "If it is proven that taxes were evaded or tax laws were violated, we will not only recover the evaded taxes but also strictly punish offenders under the Tax Crime Punishment Act."

Meanwhile, the NTS conducted tax investigations on a total of 540 livelihood tax evaders?181 in 2019, 178 in 2020, and 181 in 2021?recovering 1.0088 trillion won in income and collecting 614.6 billion won in taxes.

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