Gwangju Develops Farmland Speculation Investigation Method... Recovers 10.6 Billion KRW in Local Taxes

Gwangju City Develops New Paradigm for Managing Agricultural Corporations
Special audit uncovers illegal real estate speculation and tax evasion
City collects 10.6 billion KRW in local taxes and receives Prime Minister's Award

Gwangju City Hall exterior view.

On July 15, the city of Gwangju announced that it has developed an investigative technique, the first of its kind in the country, to prevent illegal real estate speculation and tax evasion by agricultural corporations abusing farmland. Using this technique, the city has collected 10.6 billion KRW in local taxes.

The Gwangju City Audit Committee conducted a special audit of all 983 local agricultural corporations last year and uncovered illegal real estate activities at 114 of them. After some illegal cases involving agricultural corporations were detected during a comprehensive audit of Nam-gu in September last year, the city proceeded with a full-scale investigation through this special audit.

The city overcame the limitations of previous audits by developing an investigative method that links and analyzes various public data sources, such as local tax assessment data, farmland direct payment records, corporate financial statements, and land registers.

Through this approach, the city achieved results by presenting an alternative to eradicate groups that illegally use farmland for real estate speculation nationwide. The investigation identified 114 violating corporations, including those that leased self-cultivated farmland and those that engaged in business activities outside their primary purpose. The city requested dissolution orders for 74 of these corporations.

In addition, the city imposed 9.6 billion KRW in penalty charges and collected more than 1 billion KRW in acquisition taxes from 25 corporations that engaged in real estate business and repeated tax evasion, thereby expanding local finances by a total of 10.6 billion KRW. In recognition of these achievements, the city received the 'Prime Minister's Award' at the 17th Korea Local Finance Awards in 2024 and secured a special grant tax of 200 million KRW.

Lim Taehyung, Chairperson of the Audit Committee, said, "This investigation is an example of proactive administration that has established a new standard for managing agricultural corporations. We expect that the spread of similar cases to local governments nationwide will help eradicate illegal farmland speculation and contribute to strengthening the soundness of local finances."

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