Tax turmoil

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Tax turmoil

The National Tax Service has come upon some hard times lately, as a handful of former commissioners were arrested or resigned dishonorably for various reasons. It is therefore of course no surprise that public trust in the organization has evaporated. However, people still view it as a terrifying secret authority.

The Lee Myung-bak administration’s appointment of commissioner Baek Yong-ho, who came from outside the organization, a month ago was firmly based on the idea that the organization cannot be reformed from the inside. Baek said that the National Tax Service “is no longer a power authority, but instead will serve the people.” He unveiled a reform plan on national tax administration, saying it is “the last chance for us to regain the public trust.”

Amid all of these changes, it is noteworthy that the National Tax Service will overhaul its tax investigation procedures. The notorious investigation, which has terrified companies, will be eradicated. Instead, investigations on large companies will be conducted in a four-year cycle, which will help raise predictability and transparency. In addition, the agency will form a national tax administration committee comprised of outside personnel who will appoint three individuals to serve as director generals in the organization. The newly created posts are charged with protecting taxpayers and have the authority to suspend tax investigations or change investigators in cases where the rights of taxpayers are infringed upon.

The assumed goal of the overhaul is to mollify the public’s ire concerning the ambiguous criteria for tax investigation and to transform the organization into a more transparent agency.

We have great expectations that it will be a huge step in the right direction, hopefully leading to a major breakthrough in the fight against corruption. However, we also recall that, without exception, every past commissioner has cried out for radical reform only to end up disappointing us in the end.

The National Tax Service is a powerful authority that, by the sheer nature of its responsibilities, will always be exposed to corruption. For this reason, no matter how elaborate and detailed the reform plan is, it cannot guarantee success.

The success of the reforms will depend on substantial changes in staff awareness. Unless agency personnel have a good understanding of the changes afoot, we cannot expect things to improve too much. The National Tax Service’s officers should attempt to fully grasp the crisis the agency is facing and attempt to recognize the deep-rooted public distrust. It is our sincere expectation that the National Tax Service will implement its ambitious reform plan successfully and win the hearts and minds of the people.

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