&#91EDITORIALS&#93When the tax man errs

More than 40 percent of the appeals filed by taxpayers to the National Tax Tribunal turned up error by tax collectors. The percentage is higher than last year, indicating that Korea’s tax administration is still not fully professionalized. Considering that many consumers and small businesses fail to file appeals due to ignorance of the system or desire to avoid conflict with the tax office, the actual number of the victims of faulty tax administration must be much larger than disclosed.
When taxes are imposed improperly, the damage to taxpayers is large. Some companies went bankrupt, due to financial difficulties after overpayment of taxes.
Analysts long have complained of errors in tax assessments, but the problems have not been reduced, because of the negligence of the tax authorities and because of the very complicated tax system.
Some tax offices still rely on rough proxies to assess tax. Recently, a hotel successfully sued a tax office in Incheon. It had based its estimate of the hotel’s revenues on the number of toothbrushes the hotel purchased.
Since the tax system is complex and the tax laws change frequently, even tax experts are confused. When the system is too complex to understand easily, tax officials are likely to rely on their own discretion, an invitation to corruption.
In order to protect taxpayers and upgrade Korea’s tax administration, the government should try to improve the quality of tax officials and to make the tax system simple, clear and scientific. The government should invest more in computers and other infrastructure for the tax administration, to cut down on arbitrariness in tax assessments.
Recently, a bill to require tax officials, as well as the agencies, to compensate taxpayers for losses from improper taxation was introduced in the National Assembly. The government should make efforts to forecast annual tax revenues more accurately. The tax officials should make up their minds to make their best efforts to stop creating victims of faulty taxation. The taxpayers also should take more action against improper taxation.