Uncollected taxes exceed $33 bn in Korea on poor tax administration

South Korean tax authorities have failed to collect taxes worth more than 45 trillion won ($33.3 billion won) in the past five years, with the revenue shortfall expected to hit an all-time high this year.

According to data obtained by Representative Kim Young-sun’s office on Monday, the amount of taxes that the National Tax Service (NTS) failed to collect over the past five years reaches 45.5 trillion won.

They include 1.99 trillion won in undercharges, 8.24 trillion won in refunds to taxpayers who appealed their tax assessments, and 35.11 trillion won in collections put on hold for deficit disposal.

The amount of uncollected taxes over the last five years is similar to the decline in collections of 47.6 trillion won in the first eight months of this year from the same period last year. This means the government could have made up for much of the revenue shortfall had it collected taxes as planned.

“The government hasn’t been able to collect taxes it should have due to NTS’s poor tax collection when the national treasury is running out and the debt is swelling,” Kim said. “The Yoon Suk Yeol administration is in a state of emergency to secure tax revenue.”

On an annual basis, in the meantime, the amount of uncollected taxes is on a decline. The amount reached 10.41 trillion won in 2018 but dropped to 7.63 trillion won last year.

The National Assembly plans to thoroughly examine the tax authority’s collection system in this year‘s national audit.