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[Op-Ed] Tax Agency Reform

Posted August. 14, 2009 23:20,   


The National Tax Service was founded in 1966 under President Park Chung-hee. The first commissioner was Lee Nak-sun, who had gained Park`s trust in the 1960 student revolution. Led by a close aide to Park, the tax office rapidly grew into an influential government agency. Though still a government organization led by a vice minister-level official, the service boasts an organization and authority stronger than those of state agencies run by minister-level officials. It has around 20,000 employees and an annual budget of 789.9 billion won (637.5 million U.S. dollars). Certain tax commissioners who showed stellar performance were even been promoted to ministers.

Over the 43 years since its foundation, the tax service has contributed to national development by procuring the financial resources required for growth. Yet it has also long been used as a "sword" by the powers that be. Previous military governments used tax data on the wealth of individuals and businesses to pressure companies and get political funds. The agency was also used as a puppet to defame or keep in check organizations and individuals from criticizing the government’s abuse of authority. Worse, unscrupulous tax officials used their authority to take bribes or hoard wealth.

In a meeting of high-ranking tax officials hosted by newly appointed tax commissioner Baek Yong-ho, the tax agency released its internal reform plan. Under the measures, outsiders will be hired for three director posts -- supervisor, director of protecting taxpayers, and director of managing electric information -- among the agency`s 11 directors. Audits will be conducted on large corporations with revenue of 500 billion won (403.5 million dollars) or more every four years, and committees on tax administration and personnel management will be set up. Baek said, “I’ll enhance transparency of the organization and personnel management, improve the predictability of tax audits, and strengthen measures to protect taxpayers` rights.”

The tax agency’s image has suffered damage due to several scandals over the past decade. Of six commissioners from Ahn Jung-nam, who was appointed in 1999, to Han Sang-ryule, who took office in 2007, five were implicated in shameful scandals while in office or after retirement. When they were appointed, they promised to painstakingly reform the tax agency, but did not keep this pledge. Distrust of the national tax office is unacceptable. The agency should be reborn into a trustworthy organization free from political influence-peddling and respected by the public.

Editorial Writer Kwon Sun-hwal (shkwon@donga.com)