Tax agency widening its 5-year auditing netThe National Tax Service said yesterday it plans to broaden its regular tax audits of companies, starting next year.
Currently, five-year tax audits are conducted on companies with annual revenues exceeding 500 billion won ($472.7 million). The new system will lower the threshold to companies with revenues exceeding 300 billion won.
That will widen the tax audit net to 1,100 companies from the current 600 or so.
As of the end of last year, 689 companies had annual sales of more than 500 billion won, and there were 425 companies with revenues of more than 300 billion won but less than 500 billion won.
The tax agency said until now companies with sales below 500 billion won were audited based on whether they paid their taxes honestly or in time.
Regular audits were adopted in 2009. At the start, the regular audits were done every four years. That was relaxed to every five years under the business-friendly Lee Myung-bak administration.
The decision was made yesterday by the tax agency’s tax audit supervision committee, which is made up of not only NTS officials but also non-government officials such as scholars, legal experts and representatives of business lobby groups, including the Korea Chamber of Commerce and Industry.
Only one third of the committee members are from the NTS. The committee was created to strengthen the tax agency’s auditing system while reducing the influence of top officials from the NTS. Its first meeting was yesterday. Numerous tax fraud cases involving top NTS officials hit the headlines earlier this year.
“Although tax audits are one of the nation’s most important national administrative duties, they have failed to gain the public’s trust or support,” said Ahn Dae-hee, the former supreme court justice who heads the supervision committee. “I hope this would be the first step in winning public trust.”
BY LEE HO-JEONG [firstname.lastname@example.org]
More in Economy
Tapped out and hunkered down, Korea stares recession in the face
Property owners get big tax shock
Household debt keeps climbing despite gov't efforts
Career interruptions due to marriage and childbirth down 11 percent
Despite vaccine shot in the arm, credit risk remains in markets