Unpaid taxes seized from hagwon quadruple last year: tax agency

A woman walks past hagwon advertisements in this 2023 file photo. (Lee Sang-sub/The Korea Herald)

The state-run tax agency said it seized 28.6 billion won ($20.6 million) in unpaid taxes from local hagwon last year, over four times the amount collected the previous year.

The additional taxes were collected after a series of nationwide tax evasion crackdowns on hagwon by the National Tax Service, according to NTS data submitted to Rep. Lim Gwang-hyeon of the main opposition Democratic Party of Korea. Last year, the figure hit 6.6 billion won, compared to 5.1 billion won in 2021 and 18.9 billion won in 2020.

Lim pointed out that the number of hagwon tax audits spiked particularly following President Yoon Suk Yeol's allegation referring to the private education industry as a “powerful cartel for self-interest," in June last year.

The Yoon administration has been cracking down on alleged irregularities in the operations of the nation's largest hagwon for allegedly using their collective influence for false advertising, to promote excessive spending on private education and to sell and buy above-level questions from mock exams for the state-run college entrance exam.

The NTS conducted audits of such privately-run academies on 25 occasions in 2023, compared to 12 times in 2022. In comparison, it conducted audits of private loan companies on 42 occasions last year to collect 9.6 billion won in unpaid taxes, which was fewer than the 54 audits conducted in 2022, which came up with 10.4 billion won in unpaid taxes.

"Emergency tax audits of hagwon were conducted after the president's remarks, which stirred up confusion in the education field ahead of the college entrance exam, raising concerns about the misuse of (the government's) authority to conduct such audits... Measures are needed to ensure tax audits remain politically neutral," Rep. Lim said.

By Yoon Min-sik(minsikyoon@heraldcorp.com)