Goyang City Shines with Its Own Tax Audit Capabilities... Uncovers 10 Billion Won in Evaded Taxes, Achieving Record-Breaking Results

Goyang City Establishes Systematic Audit Framework with Regular, Occasional, and Targeted Investigations
Leading Fair Taxation Through Post-Management of Local Tax-Exempt Corporations
Tax Audit Recovery Surpasses 10 Billion Won, Far Exceeding Last Year’s Results and Signaling Fiscal Expansion

Goyang Special City in Gyeonggi Province (Mayor Lee Donghwan) is expected to achieve remarkable results this year, with just over two months left in the year, as it has already surpassed last year's tax audit performance. It is particularly encouraging that most of these achievements were made through the city’s own tax audit capabilities.

Exterior view of Goyang Special City Hall. Provided by Goyang Special City.

So far, the city has uncovered 10 billion won in tax evasion sources through various investigations, including regular tax audits, representing an increase of 2.3 billion won compared to last year's final figure of 7.7 billion won. This is an increase of approximately 30% year-on-year. Considering the remaining period, it is likely that the total will far exceed 10 billion won, which will help support Goyang’s finances.

◆ Implementation of Regular and Occasional Tax Audits by Category ... Establishing a Systematic Audit Framework

The city selected a total of 100 corporations as targets for regular tax audits through the Local Tax Review Committee in February 2025 and is currently conducting audits on these corporations.

To date, 74 corporations have been audited, uncovering 6.6 billion won in tax evasion sources. This is a 100% increase compared to last year’s final figure of 3.3 billion won, and with the current audit completion rate at 74%, the city is on track to achieve its highest-ever performance in recent years through its own tax audits.

Tax audits are being conducted across various industries, including accommodation, construction, trust, manufacturing, service, real estate, and wholesale and retail. Among these, the most notable result this year is the recovery of approximately 2 billion won in evaded acquisition taxes through audits targeting disguised branch operations by corporations under the guise of accommodation consignment operations, particularly in areas subject to heavy taxation due to overpopulation control.

In addition, to reduce the tax audit burden on corporations facing economic difficulties and to support stable management, the city primarily conducted paper audits this year, supplementing them with on-site audits when necessary, demonstrating flexibility in its audit approach.

When clear evidence of tax evasion was found in reported content, the city immediately designated the corporation as a target for occasional tax audits and conducted audits accordingly, actively working to uphold tax justice.

◆ Strengthening Targeted Audits in 'Blind Spots' of Taxation ... Thorough Tax Source Management

In addition to regular tax audits, the city has been identifying its own targeted audit projects and conducting joint audits with Gyeonggi Province to eliminate blind spots in local tax collection and uncover hidden tax sources, striving to ensure fair taxation.

Unlike one-on-one corporate tax audits, targeted audits focus on vulnerable areas that require ongoing management. Gyeonggi Province and local governments jointly analyze and select projects, then conduct simultaneous audits on subjects suspected of tax evasion. This method is known to be optimized for managing tax sources thoroughly and preventing omissions in local tax collection.

So far, the city has investigated 1,467 cases in vulnerable areas such as first-time home purchase exemptions, corporate-affiliated research institute exemptions, post-management of gifts with liabilities, and deemed acquisition by dominant shareholders, recovering approximately 300 million won.

The city plans to continue conducting targeted audits in vulnerable areas through the end of the year and to do its utmost to uncover omitted tax sources, ensuring thorough tax source management for fair taxation.

◆ Post-Management of Local Tax Exemption Corporations ... Leading the Way in Fair Taxation

To maintain tax equity with honest taxpayers, the city conducts a comprehensive survey every year of corporations that have received unjustified exemptions by failing to meet exemption requirements.

By investigating the adequacy of exemption requirements for 588 properties acquired by corporations through the third quarter of this year, the city collected an additional 3.1 billion won in local taxes. This represents a 48% increase compared to 2.1 billion won during the same period last year and already surpasses the previous year’s final collection amount of 2.4 billion won.

The local tax exemption system is designed to reduce or exempt taxes for taxpayers who meet certain conditions, with the aim of revitalizing the local economy, supporting the socially disadvantaged, or fostering specific industries.

Such exemptions are generally applied only when requirements are met; if the requirements are not satisfied, exemptions may be restricted or not applied. Typical exemption requirements include direct use within a grace period and meeting the required holding period.

The city will continue to provide advance guidance to ensure that properties are used in accordance with the exemption’s purpose, and will strengthen post-management and systematic tax source management to prevent unjustified exemptions, actively working to realize fair taxation and foster a culture of honest tax payment.

◆ "To Conduct Fair Tax Audits, Job Competency Must Be Strengthened" ... Training Future Tax Audit Personnel

Recognizing the need to enhance job competency for greater fairness and trust in tax audits, Goyang City has been working to improve the practical understanding and expertise of acquisition tax officers at each district office. Using its own tax audit personnel, the city provided job training to 25 employees from August 6 to 13 and is currently applying the training to practical work.

In particular, by strengthening the city’s role as a control tower for acquisition tax work, it has fostered a unified perspective among district office staff and created an opportunity to encourage honest reporting by small and medium-sized corporations with less tax experience.

Moreover, since acquisition tax accounts for a large portion of tax audit items, the city expects this to contribute to the training of future tax audit personnel.

Meanwhile, unlike the National Tax Service, which assigns tax audit duties internally through qualification exams to strengthen audit capabilities, local governments still rely on individual competency developed through practical training.

The city plans to institutionalize acquisition tax job training and provide those who complete the training with opportunities to participate in tax audits, ensuring accurate and systematic tax source management in the future.

Mayor Lee Donghwan of Goyang Special City stated, "We are deeply aware of the current situation, where our financial independence and revenue base are weak, and have made great efforts to address this. We will continue to strive for fair taxation and resource expansion through systematic revenue management for the remainder of the year."

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