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Large Companies to Face Audits Every 4 Years

Posted August. 14, 2009 22:33,   


The National Tax Service from next month will audit large corporations that generate more than 500 billion won (403.5 million U.S. dollars) in revenue every four years.

It will also appoint outsiders to the agency`s three major posts, positions which account for 30 percent of directors at headquarters. Significant power over personnel management will be given to the heads of regional tax offices instead of the tax commissioner.

The service yesterday held a meeting of high-ranking officials and announced measures to reform tax administration at its headquarters in central Seoul. The meeting was attended by 260 tax officials, including the heads of six provincial tax agencies, 107 tax offices, and those assigned abroad.

“We decided to conduct audits on large corporations every four years to improve objectivity and predictability,” a tax official said.

The tax agency used to impose ambiguous standards under which large corporations would be subject to audits every five years after a previous audit. The standards raised controversy whenever an audit was done on a large corporation.

For small and medium-sized companies with revenue of less than 500 billion won (403.5 million dollars), it will consider how faithfully such a company has paid its taxes when it decides who to audit.

The evaluation standards will also be made public.

The commissioner will appoint three outsiders to the director posts of supervisor, chief of protecting taxpayers, and head of electric information management. The director in charge of protecting taxpayers, a newly created post, can request a temporary halt to audits, a change in tax investigators, and punishment for tax officials when the rights of taxpayers are violated.

A personnel committee led by a deputy manager of the headquarters office will deliberate on personnel management standards and promotion and transfer matters. The right to transfer grade four and five government officials will be given to provincial tax chiefs instead of the commissioner.

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