Customs Service Shrinks When Facing Law Firms... 90 Billion Won in Taxes Returned Due to Defeats

Only One Specialized Lawyer... Unable to Compete with Large Law Firms
"Need to Supplement Specialized Personnel and Customs Administration System" Pointed Out

The Korea Customs Service refunded approximately 90 billion won in taxes last year after losing administrative lawsuits. It has been pointed out that the fact that there is only one lawyer in charge of litigation had an impact.

According to data received by Rep. Yang Gi-dae of the Democratic Party from the Korea Customs Service on the 16th, the total refund amount due to losses in administrative lawsuits over the past five years from 2018 to last year was 254.4 billion won.

By year, the amount surged from 14.9 billion won in 2018 to 106 billion won the following year, then decreased to 30.5 billion won in 2020 and 13.1 billion won in 2021, before rising again to 89.9 billion won last year. The number of lost cases was 23 in 2018, 35 in 2019, 20 in 2020, 23 in 2021, and 22 last year.

According to data provided by the National Assembly's Planning and Finance Committee last year, the Korea Customs Service paid 5.174 billion won in administrative lawsuit attorney fees over the past 11 years. During the same period, the amount refunded due to losses reached a staggering 5.003 trillion won. Despite spending 5.174 billion won on litigation representation costs, over 5 trillion won was refunded.

[Image source=Yonhap News]

Rep. Yang pointed out that one of the causes is the severe shortage of professional personnel such as lawyers in charge of lawsuits at the Korea Customs Service. Companies dissatisfied with taxation file lawsuits backed by large law firms, but the Korea Customs Service has only one lawyer in charge of litigation. Moreover, this lawyer is only stationed at the headquarters, with none at regional offices.

Because of this, the Korea Customs Service's administrative lawsuits are overwhelmingly conducted directly rather than through representatives. As of 2021, out of a total of 59 administrative lawsuits, 86.6% (51 cases) were conducted directly, and 13.6% (8 cases) were conducted through representatives.

In fact, the Korea Customs Service showed a particularly weak performance in administrative lawsuits against the six major large law firms: Kim & Chang, HwaWoo, Yulchon, Sejong, and Bae, Kim & Lee Pacific. Among the 22 cases the Korea Customs Service lost last year, half (11 cases) were against these six major law firms.

Therefore, voices are emerging that investing an appropriate level of budget to reinforce professional personnel and systems to prevent unnecessary lawsuits and refund payments aligns with the national interest from a long-term perspective. The Korea Customs Service plans to hire two specialized litigation lawyers this month.

Rep. Yang stated, "Refunding huge amounts of taxes shows that there are problems in the administrative system of the Korea Customs Service," and added, "It is necessary to review the entire customs administration and establish an effective litigation response system."

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