Tax Investigation into 554 People Suspected of Speculation This Week

At the end of February, National Tax Service (NTS) will implement tax investigation for 554 people suspected of speculating in land or stores located in development-planned districts such as New Town in Seoul, Pangyo, and Gyeonggi.

Lee Yong-seop, the head of NTS, announced on February 16 in a meeting of executive tax officers that it would carry out a tax investigation into suspected speculators with 934 members of the working forces. The meeting was attended by six regional officers of NTS and 104 superintendents from the tax offices.

The tax investigation was planned according to the forecast that demand for speculation can be promoted by increasing investment of floating money in land market as housing market is stabilized by “10/29 Real Estate Policies.”

The major subjects of the tax investigation are those suspected of speculating in land where they do not reside, speculators who are not capable of the fund, and those who received more than 0.5 billion won without a source of income.

NTS will track flows of the fund related to real estates which were purchased or transferred after 1998 in order to verify the omission of donation tax or transfer income tax.

NTS analyzed the documents related to the dealings of 42,622 people who purchased land or stores, which were handed over by the Supreme Court and the Ministry of Construction and Transportation.

The subjects of the analysis were candidate districts for new capital, speculation-expected districts in Daejeon and Chungcheong, development-planned districts in metropolitan area, districts surrounding high-speed railway stations, districts for new town in Seoul, and districts related to moving of U.S. Army base, and others.

In addition, Lee announced that it would postpone a tax investigation for small or medium-sized enterprises which created jobs.

Tax investigation will be postponed for small or medium-sized enterprises which created jobs and good taxpayers among the enterprises notified for cooperation of labor and capital.

The enterprises that employed or are planning to employ new workers to have an employee count of more than 10 people and 110 percent of averages of last year by extending production line or business scale are included. Meanwhile, Vice Premier and Finance and Economy Minister Lee Hun-jae, who was present at the meeting, made a request to deal with speculation in real estate, unearned incomes, and dealings without record which arouses a sense of incompatibility among the nation and makes management of economy difficult.

Ji-Wan Cha cha@donga.com