Tax Appeals Double in 5 Years of Moon Administration... Increase in Real Estate Holding Tax Petitions

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[Asia Economy Sejong=Reporter Son Seonhee] Last year, the number of tax appeal cases related to national and local taxes reached an all-time high. This increase is attributed to the growing complexity of various real estate tax systems, leading to more appeals.

According to the recently published "2021 Tax Appeal Statistical Yearbook" by the Tax Tribunal on the 19th, the total number of tax appeal cases processed last year was 16,588, marking a record high. Compared to 2017, when the Moon Jae-in administration began (8,351 cases), this figure nearly doubled in just five years.

By tax category, local tax-related appeals surged nearly fivefold from 1,470 cases in 2017 to 7,262 last year. This is due to the sharp rise in real estate prices under the current administration and the imposition of punitive heavy taxation on multi-homeowners, which increased appeals related to property tax and acquisition tax.

During the same period, among national taxes, appeals related to comprehensive income tax, including real estate rental business income, increased nearly threefold from 1,163 to 3,190 cases. Although the proportion is relatively low compared to the total number of cases, appeals related to gift tax also increased more than fivefold from 163 to 821 cases over the past five years, and inheritance tax appeals rose more than sevenfold from 36 to 261 cases.

As the number of tax appeal cases continues to rise, the limited personnel available has led to an increasing number of appeals being carried over without resolution each year. This year, the number of carried-over tax appeal cases reached 4,441, marking the first time it exceeded 4,000. Although the annual number of cases handled per tax judge last year was 1,518, up from 1,125 five years ago, it was still insufficient to cope with the surge in appeals.

In this regard, the Presidential Transition Committee is reportedly considering adopting the establishment of an "Integrated Administrative Tribunal" that consolidates various administrative appeal functions, including tax appeals, as a national agenda. This was also a campaign pledge of President-elect Yoon Seok-yeol during the last presidential election. Currently, general administrative appeals are handled by the Central Administrative Appeals Commission under the Anti-Corruption and Civil Rights Commission. Separately, there are specialized administrative appeal organizations such as the Tax Tribunal under the Office for Government Policy Coordination, the Personnel Appeals Commission under the Ministry of Personnel Management, and the Central Labor Commission under the Ministry of Employment and Labor. The plan is to unify these scattered organizations into a single window for filing various administrative appeals. A government official explained, "Under the current structure, citizens have the inconvenience of having to determine by themselves which type of appeal to file," adding, "There is a need to establish an administrative appeal hub system through organizational restructuring."

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