South Korea's National Tax Service has received more than 1,500 tips through its property tax-evasion reporting center since the Lee Jae-myung administration took office, but it has not disclosed how many led to actual back-tax collections. The agency set up a dedicated reporting channel to uncover suspected evasion, yet it has been unable to produce statistics showing what the operation has achieved, raising questions about its effectiveness.
According to data submitted by the NTS to the office of Rep. Kang Min-kuk of the People Power Party, a member of the National Assembly's Strategy and Finance Committee, the property tax-evasion reporting center received a total of 1,568 tips from October last year, when it began operating, through August this year. That works out to an average of about 157 tips a month.
The center was created to collect reports of suspected tax evasion arising in the course of acquiring, holding or transferring real estate. The NTS cross-checks the reports against taxation records to analyze suspected evasion and, where necessary, collects back taxes following a tax audit. When a tip leads to the assessment and payment of at least 50 million won in evaded taxes and other requirements are met, the informant receives 5% to 20% of the evaded amount as a reward, capped at 4 billion won.
How many of the reports translated into actual taxation, however, is difficult to determine, because the NTS does not disclose the back taxes collected or the rewards paid through the property tax-evasion reporting center. An NTS official said the agency compiles and prepares the statistics on a year-end basis because manual tallying requires considerable time and manpower.
Reward payments for other tax-evasion tips, by contrast, are being tallied without difficulty. The NTS said rewards for all tax-evasion tips totaled 14.9 billion won in the first half of this year, equal to about 70% of the full-year total paid last year.
"Failing to show any collection results from the 1,568 tips reported over the past nine months means most of them involved unclear facts or lacked specificity and credibility," Kang said. "Rather than running a showcase reporting center that produces no results, the NTS should focus on property tax evasion through its own core audit work to prevent damage to tax justice and disruption of transaction order."
