Seongnam cracks down on its tax delinquents

On January 17, nine officials from the tax collection department of the Seongnam City government in Gyeonggi descended on a high-rise apartment complex in Jeongja-dong, Bundang District. They rang the doorbell of an apartment occupied by a 44-year-old tax delinquent.

The resident’s business failed and he owed 580 million won ($544,805) in tax. To avoid having his 270-square-meter (2,906 square foot) apartment attached, he put the ownership under his wife’s name.

That didn’t fool the tax men. When the man pretended he wasn’t in the apartment, they called for a locksmith and two policemen to force their way in. Finally the tax delinquent emerged shouting, “Show me a warrant for this search!”

They showed a warrant from the Suwon District Prosecutors’ Office.

Then they entered the apartment and began zeroing in on property to attach, including paintings, bottles of expensive wine, gold necklaces and a grand piano.

As they finished their search, the delinquent promised to submit a plan to pay his taxes by Friday.

The country’s tax laws have always allowed such searches and seizures, but tax authorities were shy about doing them, worried about angry reactions. In the past, tax officials would turn around and go back to the office if tax delinquents didn’t open their doors.

Seongnam’s city government is getting tougher because unpaid taxes are piling up. The city government said the total amount of arrears for last year was 126.1 billion, which has led them to start breaking down doors.

Lee Jae-myung, an attorney-turned-mayor studied the city’s legal rights in terms of searches and seizures. In cooperation with the Suwon District Prosecutors’ Office, Lee also appointed 15 officials from the city government and local district office as tax investigation officials. The city government says those officials have the power to ask prosecutors to charge tax delinquents.

The crackdown is paying off. The city government has attached 420 million won worth of property from 20 delinquents. It said some tax delinquents are now voluntarily paying the taxes they owe.

The city said it has collected 88.2 billion won of tax in arrears, or 69.9 percent of the total of 126.1 billion won last year, the city government’s best result ever in tax collection.

By Yoo Gil-yong, Kwon Sang-soo [sakwon80@joongang.co.kr]