Corporations’ extra taxes average W1.29b: NTS

By Korea Herald
  • Published : Aug 20, 2014 - 21:37
  • Updated : Aug 20, 2014 - 21:37
Corporations in South Korea were ordered to pay an average of 1.29 billion won ($1.27 million) in additional taxes in 2013 as a result of government-led tax audits, data showed Wednesday.

The amount is larger than the average 1.09 billion won that corporations had to pay in additional taxes due to audits in 2012, according to the data provided by the National Tax Service.

Last year, the NTS conducted tax audits on 5,128 corporations and levied a combined 6.61 trillion won in additional taxes. The amounts were up from the respective figures of 4,549 and 4.94 trillion won in 2012, the data showed.

The rise is attributable to intensified tax investigations into companies in line with the government’s move to toughen regulations on underground economic activities in hopes of expanding tax revenue.

The number of tax audits into corporations has been on the steady rise. In 2009, companies probed by the NTS totaled 3,867, which rose to 4,430 in 2010 and 4,689 in 2011.

In his confirmation hearing on Monday, Lim Hwan-soo, the nominee for the new tax agency chief, said that the NTS will not use tax audits as a means to collect taxes but vowed to toughen its crackdown on tax evasion, especially by large companies and wealthy people.

Meanwhile, the Fair Trade Commission, the country’s corporate watchdog, fined companies a combined 4.9 trillion won for violating laws from 2011-2013.

The penalties are based on investigations into 781 companies suspected of abusing their market power and colluding to fix prices, among other things.

Their final penalties, however, were later adjusted downward to 2.3 trillion won, according to the data by the Economic Reform Research, a private research body.

The FTC has not given detailed reasons for the sharp reduction.

Some experts worry that such leniency in punishment might cause the penalties to not be tough enough to deter companies from unfair business activities. (Yonhap)