Ruling Party Urges Gov"t to Crack Down on Tax Evasion by Chaebols

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Ruling Party Urges Gov"t to Crack Down on Tax Evasion by Chaebols

South Korea's ruling party on Thursday urged the government to crack down hard on tax evasion by the country's conglomerates and their founding families.
The demand by the National Congress for New Politics (NCNP) came as the giant Samsung Group came under scrutiny amid allegations that a son of the group's patriarch avoided paying millions of dollars in gift tax.
'Reform of chaebols (conglomerates) is necessary in order to achieve social justice and fair taxation by reducing tax burdens on the middle class, the underprivileged and small- and middle-sized businesses,' an NCNP spokesman said.
'For this purpose, tax probes and investigations must be pushed hard,' he told journalists.
He accused the opposition Grand National Party (GNP) of protecting those chaebols which are being investigated for alleged tax evasion.
The GNP said the Hanjin Group, which owns the national flag carrier Korean Air, and the Bokwang Group, whose largest shareholder happens to be the head of Seoul's major newspaper, JoongAng Daily, are targeted in the ongoing tax probes for political reasons.
Cho Joong-Hoon, founder of the Hanjin Group, his 2 sons and 5 other Hanjin officials were slapped with a travel ban.
The Samsung Group faces allegations of tax-dodging by a son of the group's head and its rival, Hyundai Group, is still haunted by stock price manipulation charges.
Minister of Finance and Economy Kang Bong-Kyun has said the government may impose a punitive tax on Lee Jae-Yong, eldest son of Samsung chairman Lee Kun-Hee.
According to the minister, Samsung SDS, a unit of the group, was found to have sold its 3.21 million shares to Lee Jae-Yong and his 3 sisters at a price far below the market price.
The deal alone brought them some 22.5 billion won ($18.6 million) in profits.
'Tax authorities are looking into Lee Jae-Yong's case. Should the charge be proven, a hefty punitive tax will be levied,' Kang said.
Officials of the National Tax Service (NTS), formerly known as the National Tax Administration, also hinted that some Samsung units would be subject to tax probes in connection with the alleged tax evasion by Lee Kun-Hee's children.
The head of the NTS, Ahn Jung-Nam, has said the NTS would study if the stock manipulation charges against Hyundai Group make it liable for the imposition of tax penalties.
Lee Ick-Chi, head of Hyundai Securities Co., has been arrested on charges of manipulating the stock prices of Hyundai units.

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