The amount of evaded income taxes from self-employed high earners in South Korea totaled nearly 10 trillion won ($8.58 billion) from 2010 to 2019, according to data compiled by the National Tax Service.
The report, submitted to the ruling Democratic Party of Korea lawmaker and parliamentary finance committee member Rep. Yang Hyang-ja, showed that the nation’s tax agency investigated 7,760 business owners with high income. Over the past 10 years, these taxpayers reduced their accumulated income of 21.24 trillion won by 9.55 trillion won to some 11.69 trillion won.
While the NTS conducts an annual investigation, the amount of yearly evaded income taxes grew nearly threefold from 401.8 billion won in 2010 to 1.12 trillion won last year. The tax evasion rate also jumped from 39.1 percent to 47.6 percent in the given period, the data showed.
The amount of taxes imposed on the local self-employed high earners had also gradually increased from 203 billion won to 629.1 billion won over the past 10 years, which led the total amount to be some 5.22 trillion won. But the actual amount of taxes collected came in at 3.61 trillion won.
In proportion, it marked only about 69.1 percent of what the agency was supposed to levy, as the tax collection rates steadily fell from 91 percent in 2010 to 60.5 percent last year.
“The tax evasion by self-employed high-income earners is a serious hurdle to social integration, especially in comparison to employees with transparent income sources,” the lawmaker said, calling for enhanced tax investigations for rich entrepreneurs.
By Jie Ye-eun (firstname.lastname@example.org