[Viewpoint]Fix the corrupt systemThe incumbent head of the National Tax Service has been detained on a charge of taking bribes, an unprecedented incident. That happened after the Blue House senior secretary of policy planning was taken into custody. Together, that means two key figures responsible for the state administration are now being investigated on corruption charges.
The citizens who have been faithfully paying taxes are furious.
People have already been struggling with a growing tax burden, so their anger spilled over when they heard about the corruption.
However, the resentment subsided when the head of the NTS was detained. Soon enough, everyone will forget about the allegations.
However, that should not be the end of the affair. It should not stop with the criticism and detention of a corrupt official.
If we stop there, we won’t be able to improve the system. Instead of punishing one official, it is more important to set the system and the administration right.
As long as we continue to have a system and administration that allows the head of the National Tax Service to accept bribes, corrupt officials will think the ones who are caught are simply unlucky because of a conspiracy.
It is especially important to make the system right because the corruption is related to taxes.
There has never been a single state in history that did not collect taxes, and there has never been a time in history when there weren’t any scandals involving the collection of taxes.
There are even cases in history in which serious tax-related scandals and widespread corruption led to the overthrow of the government.
Whenever these incidents have been recorded, we have paid more attention to the problems in the taxation and collection systems than the corrupt individuals.
Then what are the problems with the current taxation system and administration?
The biggest flaw is the tax audit.
Korea has one of the lowest tax audit rates among taxpayers in the Organization of Economic Cooperation and Development member countries.
Less than 1 percent of all taxpayers get audited over their income taxes.
Also, the targets of tax audits are selected arbitrarily. Therefore, the tax evaders can pull every string to not be included in the audit and still maintain a good relationship with auditors in case they are unlucky enough to get investigated.
The audit system is completely different in developed countries. No one can get involved in the process of selecting which taxpayers get audited.
The Taxpayer Compliance Measurement Program (TCMP) in the United States produces a random sampling of taxpayers to be audited during a given year when you enter the industry, region, rate of revenue increase and company size.
The tax officials use that list to conduct their investigations.
The National Tax Service needs to introduce a program similar to TCMP to make the tax investigation system more professional and scientific. Then we can at least prevent corruption in the process of selecting taxpayers to be investigated.
Another problem is the statute of limitations for taxes.
The period is five years in Korea, but many developed countries define it as 10 years or longer.
When you are charged with tax fraud, the total amount of the tax evasion during the previous 10 years gets collected.
With such an absurdly short audit list and short period of time to be investigated, there is very little possibility a tax dodger will be caught.
In other words, the price for evading taxes is small. In addition, some people bribe officials regularly so they are not included on the investigation list.
The people with money and power are said to fear the prosecutors and the National Tax Service the most.
The tax evaders make every effort to avoid being investigated in case these agencies exercize their authority. We need to give every citizen the impression that any effort to bribe someone or buy off the authorities would be futile.
It is important to spread the fact that the tax officials are only the messenger, putting the law and system into effect.
You might not have ever been caught violating the law or evading taxes, but someday, the wrongdoing is bound to be exposed.
We say, “Hate the sin, love the sinner.” It is about time. We desperately need efforts to correct the system and administration, not the people.
*The writer is a professor of economics at Sungkyunkwan University. Translation by the JoongAng Daily staff.
by Ahn Jong-bum