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Intensive Probe Into Tax Scheme Concerning Value-added Tax

Intensive Probe Into Tax Scheme Concerning Value-added Tax

Posted January. 28, 2003 22:35,   


A large-scale probe is to be launched into a tax scheme under which some people have received illegal tax credits on value-added taxes they filed. They, for example, allegedly put on the value-added tax return some items as business costs, which, however, did not exist at all.

Tax returns on value-added tax were to be filed by yesterday. Thus, the National Tax Service will pore over 4.03 million tax returns and documents attached thereto.

The tax service, once any fraudulent filing is detected, plans to determine whether to accept the tax credit filed.

Especially an intensive probe is to be conducted into retailers and wholesalers who are suspected of attempting to receive illegal tax credits on the costs by inflating the volume of the stock.

In addition, the agency will put under scrutiny those who apply for early tax refund in the name of export or investment in equipment; who filed lower incomes in comparison with other business persons in the same business and/or of same size; and who included in the submitted documentation that are not related to the business in question.

Furthermore, aware of the practice of giving incorrect receipts in the tourism and leisure industry, the service will scrutinize those who filed for huge amounts of tax credits.

The agency`s official Park Chan-wook confirmed, "If it is found that a person receives tax credit or refund illegally, we will impose 10% of the amount as penalty. Once we determine the discrepancy is intentionally conjured up, we will file a criminal claim with the prosecution."

Jin-Hup Song jinhup@donga.com