Penalty taxes on omitted income 15 times those in 1997

Penalty taxes imposed on omitted income last year were 15 times those recorded before the foreign currency crisis in late 1997.

Penalty taxes collected from wealthy people and self-employed people with high incomes last year were estimated at 3.5 trillion won, according to the Ministry of Finance and Economy (MOFE) and the National Tax Service (NTS), Sunday.

The penalty taxes sharply increased from 230 billion won in 1997, when the currency crisis began, to 1.6 trillion won in 1998, 2.5 trillion won in 1999 and 3.5 trillion won in 2000.

A MOFE official said the government had intensified investigations of omitted income since the crisis.

The government will conduct intensive tax probes of businessmen or their family members who are found to be spending too much or making frequent overseas trips, taking into consideration their reported income, he said.

At the same time, NTS will keep an eye on those who make frequent trips for golf or gambling, children who receive illegal inheritances from their parents or rich people who make illicit donations to their offspring.

Tax authorities will also monitor those who operate businesses like deluxe boutiques and ``room salons,¡¯¡¯ and high-income professionals like lawyers, doctors and entertainers, officials said.

Kwon Soon-Hwal shkwon@donga.com