New Tax Law Is in the Works

The main opposition Grand National Party has drafted a bill that would revise South Korea's tax law. The bill contains a clause barring the National Tax Service from conducting tax investigations for political purposes. It also requires the agency to release to the National Assembly records of taxes levied in a particular case upon request.

The draft revision limits the target of tax investigations to those who do not faithfully pay their taxes, those who are accused of specific cases of tax evasion by a third party and those whose accounting records clearly indicate that they evaded taxes or distorted tax records.

The Grand National Party said the purpose of introducing the bill is to prevent the government from abusing its tax-levying authority by clearly stipulating whose tax records can be searched and according to what criteria. It said current law and administrative guidelines are too vague to be effective.

Tax investigations into those the party called "faithful taxpayers" would be allowed under the bill as part of a random inquiry.

A party official said the intent of the bill is to prevent a repeat of the controversial tax investigations into 23 national media companies.

The official added that the bill requires the National Tax Service to provide information on how taxes were levied to the National Assembly in order to allow the legislature to prevent the government from abusing its authority.

Kim Mahn-je, the Grand National Party's chief policymaker, said the bill was drafted to put a stop to arbitrary tax investigations and controversies emanating from them as well as to reduce the number of people taxed or fined unfairly. Mr. Kim said his party, in cooperation with the minor opposition United Liberal Democrats, should be able to get the bill passed easily in the National Assembly.

In a related development, the main opposition said the government misappropriated 1.68 trillion won ($1.29 billion) of last year's budget. It said 645.5 billion won of the money the government allegedly misused was in violation of the Budget and Accounts Act that governs the administration of the state budget. Last year's central government budget was 156.5 trillion won.

by Lee Sang-il