Tax evaders get creative with hiding money, revenue service says

Finance

Published: 29 Nov. 2023, 15:39

Tax evaders get creative with hiding money, revenue service says

A food content YouTuber evaded hundreds of millions of won in income tax earned through advertising revenue after sending the money to their relatives' bank accounts while enjoying a luxury lifestyle that included frequent overseas trips. [NATIONAL TAX SERVICE]

YouTubers, streamers and influencers have joined the high-income tax-evading bunch, with many turning to creative ways to hide their money while secretly enjoying luxury lifestyles.

The National Tax Service released a list of 562 tax-evading high-income earners on Tuesday, and 25 were identified as content creators.

One such creator, who runs a food content YouTube channel, received tens of millions of won monthly from Google in advertising revenue.

The YouTuber did report the income received from Google but did not pay taxes with the excuse of "not having money" to pay taxes.

The YouTuber nevertheless enjoyed a life of luxury, frequently traveling overseas.

The National Tax Service, however, found that the creator had been transferring funds to relatives' bank accounts to avoid paying income tax.

Those on the list, coming from diverse kind of backgrounds, used a variety of ways to evade taxes. Some included practitioners of traditional Korean medicine and pharmacists who said they couldn't afford to pay taxes after they transferred money to borrowed-name bank accounts to hide their wealth.

Around 500 million won worth of cash and 100 million won worth of luxury goods were found at a food business owner's home after a raid by the National Tax Service. [NATIONAL TAX SERVICE]

The list included a food business owner who failed to pay around five billion won ($3.9 million) in income taxes. After the owner evaded collection by continuing the business through their children, the National Tax Service raided the owner's home and found 500 million won in cash stashed in the owner's vault and veranda.

The National Tax Service collected around 1.55 trillion won in the first half of the year alone from high-income earners suspected of concealing monetary assets. The total tax collection from tax evaders by the end of the year is expected to exceed the amount collected last year, which was 2.5 trillion won.

But despite the revenue service's efforts, the total amount of arrears is increasing. Cumulative arrears as of the end of last year were 102.51 trillion won, the first time to ever exceed 100 trillion won.

Though 11.4 trillion won of arrears were collected through cash settlements, the total amount of arrears increased by 2.6 trillion won from the previous year due to the faster pace of increase in tax arrears than collection.

BY JEONG JIN-HO, KIM JU-YEON [kim.juyeon2@joongang.co.kr]