NTS pledges support to struggling SMEs

The National Tax Service (NTS) promised help on Tuesday for struggling companies, including easing up on audits, as the shipbuilding and shipping industries are restructured and global export demand continues to be weak.

The measures will also help companies hit by the shutdown of the Kaesong Industrial Complex earlier this year.

“We have been actively providing tax support including suspending tax payments of taxpayers that have been struggling through various circumstances,” NTS Commissioner Lim Hwan-soo said during a meeting with Park Sung-taek, chairman of the Korea Federation of SMEs, and several CEOs.

“To further ease the burden [on SMEs] we will expand our simplified audits while reducing post hoc verification,” Lim said.

The NTS chief’s comment came as SMEs face a particularly hard time in the second half of the year.

Representatives of SMEs have asked the agency to cut back on investigations. Many have complained that an increase in tax audits has become a major burden on them.

A study released by the Korea Federation of SMEs last November showed that 66.7 percent of 518 companies participating in the survey had experiences problems with tax audits in the previous two years. And 42.1 percent of the respondents said investigations by the tax agency had strengthened compared to the past.

The agency said in April that it would maintain this year’s audits at the same level as last year, which was 17,000 cases.

The commissioner, however, made clear that he would not be lenient with tax evaders or those who intentionally do not pay their taxes.

“I will operate the tax policies in a way that it will be imprinted [on the public] that the best way to reduce tax payments is through honest reporting,” Lim said.

At the meeting, small-business CEOs also requested tax support for SMEs when expanding overseas and coordinating national tax auditing with regional governments, especially on income taxes.

They also asked the tax agency to allow supermarkets that are members of the small and medium logistics center to deliver alcoholic beverages.

Independently run neighborhood supermarkets have recently been running joint distribution centers where they purchase bulk alcohol and other processed products. The measure is meant to ease the financial burden when competing with major discount stores like Lotte Mart and E-Mart.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]