Half of Customs Tax Delinquents in Arrears for Over 10 Years... Outstanding Taxes Exceed 1 Trillion Won

Assemblyman Cho Seungrae of the Democratic Party:
"Hidden Assets Must Be Tracked and Detention Orders Enforced"

More than half of domestic high-value and habitual tax delinquents have been in arrears for over 10 years, making them long-term delinquents.

Cho Seungrae, member of the Democratic Party of Korea. Photo by Cho Yongjun

According to data submitted by Assemblyman Cho Seungrae of the Democratic Party of Korea, a member of the National Assembly’s Strategy and Finance Committee, the Korea Customs Service’s list of high-value and habitual customs tax delinquents nationwide included a total of 224 individuals as of last year, with total outstanding taxes amounting to 1.2671 trillion won.

By delinquency period, long-term delinquents with over 10 years of overdue taxes accounted for 54% (122 individuals) of the total, and among them, 9 individuals had been in arrears for over 20 years. In terms of the amount owed, those who had been delinquent for between 10 and less than 15 years (74 individuals) owed 1.0174 trillion won, representing 80% of the total outstanding taxes.

By number of delinquency cases, the largest group was those with over 100 cases, totaling 61 individuals (27%), whose outstanding taxes amounted to 967.5 billion won, accounting for 76% of the total.

The individual with the highest amount owed is a sesame seed importer in his 70s, surnamed Jang, who is often referred to as the "Sesame King" and has been featured in the media multiple times. His outstanding taxes amount to 448.3 billion won. In 2020, a delinquency tracking team raided his residence and seized 2.3 billion won in assets, but the remaining taxes have not been paid, with Jang claiming he has no money. Another sesame seed importer, who is both Jang’s business partner and a high-value delinquent, was subjected to a detention order by the Korea Customs Service in January this year, resulting in 30 days of detention. This marked the first instance of detention being executed against a customs tax delinquent.

The individual with the highest number of delinquency cases is a man in his 40s, surnamed Hong, who has accumulated a total of 21,445 cases since 2008, including unpaid customs duties and surcharges related to health supplement imports, with outstanding taxes amounting to 1.1 billion won. The longest-term delinquent is a man in his 70s, surnamed Kwon, who has been in arrears for over 20 years since 2003, failing to pay 1.1 billion won in customs duties and surcharges for bicycle parts imports.

The Korea Customs Service has imposed 26 travel bans, provided credit information in 41 cases, and executed 1 detention order as sanctions against these high-value and habitual delinquents. From January to July this year, the agency conducted 33 field investigations and seized assets in 328 cases. However, there are criticisms regarding the effectiveness of the system, as only a few dozen cases and a few billion won in voluntary payments have been made each year following the public disclosure of the list.

Assemblyman Cho stated, "More than half of high-value and habitual customs tax delinquents have failed to pay taxes for over 10 years, with some continuing their delinquency for more than 20 years. Although the public disclosure system has been in place for nearly 20 years, its impact on encouraging voluntary payment remains limited. The Korea Customs Service must not only effectively enforce existing sanctions such as travel bans, credit information provision, and detention, but also strengthen measures to track hidden assets and recover delinquent property from long-term and malicious delinquents."

The Korea Customs Service has operated the public disclosure system for high-value and habitual delinquents since 2007 to encourage voluntary payment. Under the Customs Act, personal information is disclosed for those who have been in arrears for over one year and owe 200 million won or more in customs and related national taxes. However, individuals undergoing appeal procedures or those who have paid at least 50% of their outstanding taxes in the past two years are excluded from the list.

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