National Tax Service Launch Tax Investigation Soon

The National Tax Service (NTS) will launch a tax investigation into major corporations including Samsung, LG, SK and Hyundai Motors that gave illegal campaign funds during the 2002 presidential election.

“We will carry out a tax investigation into large companies that gave illegal campaign funds during the last presidential election,” Lee Yong-sup, Commissioner of the NTS, said on Friday. “Companies that are revealed to have been involved in the funds will be under the investigation without exception.”

The NTS, above all, will conduct the tax investigation into Samsung, LG, SK and Hyundai Motors. The prosecution found out that the four corporations provided illegal political funds.

The NTS will expand the investigation into other major corporations, such as Lotte, Doosan, Kumho, Hanwha, Hanjin, Hyosung and Hanjin, if they are confirmed to have given illegal political funds. The Central Investigation Agency of the Supreme Public Prosecutors Office will continue its investigation into 10 major corporations over the funds until the end of January.

Commissioner Lee explained, “It is very likely that the companies applied window dressing settlement if they collected the funds by manipulating their working capital. So, they deserve to be under the tax investigation.”

It is reported that the NTS is considering tough measures, such as indictment, if the corporations are revealed to have evaded taxes.

Up to now, the prosecution has found out about 50.2 billion won of illegal political funds. Samsung provided 15.2 billion won, followed by LG with 15 billion won and SK and Hyundai Motors with 10 billion won each. The NTS will be handed the data from the prosecution and utilize it in the tax investigation.

It is known that the NTS is also considering investigating Chairmen Kang Geum-won of Changshin Textile and Moon Byeong-ok of Sun & Moon Group, who handed in campaign funds to the Roh Moo-hyun camp.

“I am not informed of the tax investigation of the NTS,” said a high-ranking official at an audit and inspection agency, adding, “if the NTS does investigate, it will focus on revealing tax evasion of the corporations involved in illegal campaign funds.”

Young-Hae Choi yhchoi65@donga.com