Shame on the tax service

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Shame on the tax service

Published: 30 Jul. 2013, 20:42

The prosecution raided former National Tax Service Commissioner Jun Gun-pyo’s home and the top tax agency yesterday. Prosecutors said they had conducted the search and seizure raid to see if Jun had lobbied for tax exemptions for CJ Group in return for bribes and if he was involved in a decision not to charge additional tax even after uncovering the conglomerate’s massive tax evasion amounting to hundreds of billions of won during its regular inspections of large companies’ stocks transfers in 2006. If these suspicions turn out to be true, the situation is utterly shocking as it would be the first time the head of the national tax office turned a blind eye to tax dodging in exchange for kickbacks. If the suspicions prove true, other senior tax officials will also be arraigned on bribery charges.

At this stage of the prosecution’s investigation, it’s too early to tell the core truth of the matter. But the fact that the National Tax Service and its former head were raided on such disgraceful suspicions is itself an insult to them - and to us taxpayers. Circumstantial evidence also points in the direction of the suspicions as seen in the arrest last week of Heo Byung-yik - former deputy commissioner of the NTS and then-head of its corporate tax bureau - on charges of receiving bribes worth $300,000 in cash and a luxury watch. Moreover, Heo reportedly said he delivered the bribes to his boss, Jun, after receiving them from CJ Group.

The arrest of the No. 2 man in the nation’s tax agency is in itself political dynamite. Despite many cases of bribery among low-level officials, detention of the deputy commissioner is a very rare event. If the former head of the tax agency turns out to have been involved in helping companies evade taxes, it will no doubt taint the agency’s reputation. The agency will have trouble persuading law-abiding citizens to pay their taxes and eventually turn into a hotbed of corruption.

And the repercussions will go far beyond that. The Park Geun-hye administration is aggressively trying to uncover the underground economy to be able to tax more economic activity to pay for new welfare programs.

If the former commissioner really took bribes from CJ to aid its tax evasion, the government’s war on tax dodging can’t but lose momentum or entirely fizzle out.

We urge the government to revamp the nation’s top tax office from top to the very bottom. Of course, the NTS has been exerting efforts to clean itself up by declaring a war against corruption. But that’s obviously not enough. The crusade for tax justice must be launched by all the parties involved.