False Residence Registration Numbers on 3.95 Million Financial Accounts

It was revealed that 3.98 million financial accounts have the wrong resident registration numbers. According to the National Tax Service (NTS), there are big holes in the real-name financial transaction system and financial income taxation owing to the mismatch between the resident registration numbers filed in the digital network of the NTS and the financial accounts that have different information from the data the NTS has. The NTS declared that it would tax the amount in arrears that was accrued due to the mismatched information.

The Financial Supervisory Service (FSS) announced on January 6 that it examined 3.98 million financial accounts that have the wrong resident registration numbers after examining 374.99 million accounts in 1,314 financial institutes including banks and insurers around the nation. The FSS says that 1.77 million cases were due to the failure of people to report of their changed resident registration numbers during the years of information digitization from 1992 to 1995, and the rest of the cases were presumably due to input errors and intentional forgery.

Assistant Governor Gang Kwon-seok of the FSS said, “It appears that most of the mismatches occurred due to input errors, and a range of intentional forgery could be found after the financial institutions finish the inquiry at the end of February,” adding, “We decided to check the information concerning the errors in the resident registration number against the purpose of the real-name financial transaction system law.”

The NTS said that it would tax the amounts arrears if the resident registration numbers are corrected after the financial institutes check the wrong numbers with the real bank accounts’ owners’ registration numbers, using the corrected information as the source of financial income taxation.

According to Kim Yeong-geun, the chief of the Income Taxation Department, “If the residence registration numbers in the financial accounts are different from the data in the network of the NTS, the accounts are not used as the source materials for taxation.” He added, “Fundamentally the system couldn’t tax accounts that have different residence registration numbers from what the system has.”

This information fallacy tells us that the 3.98 million financial accounts have not been the subject of financial income taxation by the NTS until now.

Jeong Yong-hwa, head of the Examination Planning and Coordination Department, said, “The examination will tell just the errors in numbers, and the amounts of money in the accounts that have the wrong residence registration numbers will be possibly revealed after each financial institute finishes its own inquiry.” The amount of money that was excluded from the financial taxation is projected to be confirmed as early as late February.

One of the main causes of these errors in the residence registration numbers relies on the failure of financial institutes’ equipping the check system of the residence registration number, which is commonly used in the Internet, analysts said.

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