[2024 National Audit] Customs Duty Evasion Detected Amounts to 1.2 Trillion Won in the Last 4 Years

by Jeong Ilwoong

Published 18 Oct.2024 10:43(KST)

From 2020 to 2023, an average of 61 attempts of customs evasion were detected annually, with the amount detected per case reaching 5 billion KRW.

According to data submitted by the Korea Customs Service to Lee In-seon, a member of the National Assembly’s Planning and Finance Committee (People Power Party, Daegu Suseong-gu B), the total amount of customs evasion detected over the past four years was confirmed to be close to 1.2 trillion KRW.

This year as well, by the end of August, the amount detected for customs evasion exceeded 100 billion KRW, indicating that customs evasion continues openly.

In particular, Lee pointed out that the customs evasion detection status submitted by the Korea Customs Service does not include the recently increasing small-amount “under-valuation” method through overseas direct purchases, so the actual scale of customs evasion occurring in the field is expected to be larger.

Under-valuation is an abbreviation of Under-Valuation, a type of tax evasion method where the declared price is lower than the actual product price when purchasing goods from overseas to avoid customs duties.

This includes declaring goods at or below the customs duty threshold of 150 USD to be exempt from customs duties, or falsely declaring goods priced above 150 USD (the customs duty threshold) at a lower price to apply a relatively lower tax rate.

Although the Korea Customs Service conducts crackdowns on under-valuation, Lee criticized that proper management is not being carried out due to a lack of institutional grounds and work overload. He also emphasized that customs evasion acts such as under-valuation cause losses to national finances and harm consumers.

Lee said, “The fact that the amount of customs evasion over four years reaches 1.2 trillion KRW is a serious problem,” adding, “This is a pretext causing serious damage to national interests, and active response from the Korea Customs Service is required.”

He added, “To ensure that the public’s taxes are properly managed and honest consumers are protected, the National Assembly will continuously raise these issues and urge the preparation of concrete improvement measures through national audits and other means.”