Uncollected Taxes Total 117.2 Billion Won

From July last year through June 2004, the amount of tax which the National Tax Service (NTS) has left out due to administrative mistakes reached 110 billion won, announced the Board of Audit and Inspection (BAI) of Korea.

In addition, the National Tax Service turned out to have resorted to an expedient way while it was involved in the construction of “Gangnam Joint Government Building,” which was established in Yuksam-dong in Gangnam, Seoul, at the end of 2003.

According to the “Balance sheets of fiscal year 2003” that BAI presented to the National Assembly yesterday, the NTS hasn’t collected 117.2 billion won of taxes during the period of July 2003 through late June of this year, which was resulted from neglecting tax evasions or leaving out the subjects of taxation.

The BAI therefore disciplined eight involved public servants and took necessary measures by either additionally charging the full amount of uncollected taxes or preserving them.

This report revealed that Jinju tax office in Gyeongnam Province neglected to collect 4.7 billion won of transfer tax from a majority shareholder, who possessed more than 10 billion won worth of stocks and gained 12 billion and 450 million won of marginal profits by selling 330,000 company shares.

The headquarters of NTS omitted collecting 9.3 billion won of stock transfer taxes and gift taxes by mistakenly excluding people who have more than 10 billion won worth of stocks and those whose properties are liable for stock transfer taxation.

Twenty-nine local tax offices including the Gangnam office missed 6.8 billion won of taxation that should have been collected from construction companies and others, because of miscalculation of taxation.

Meanwhile, the NTS exchanged its real estate in northern Daegu city with funds for its plan to purchase land and built the “Gangnam Joint Government Building,” which was to be used as a national tax counseling center, and three tax offices in Samsung-dong, Yuksam-dong and Seocho-dong in Seoul.

In addition, the amount of 1.45 billion won of budget originally allotted for operational expenses was misused for office remodeling.

The BAI issued warning measures to NTS, considering that it was inappropriate for the NTS not to have ensured the budgets for building reconstruction in advance and exchanged them with lands, as well as to have misused its budget.

Jae-Seong Hwang jsonhng@donga.com