Credit card firms’ mistakes add fuel to income tax row

Data recording mistakes by some credit card firms are fueling public anger over the government’s income tax policy.

The nation’s four major card firms ― BC, Shinhan, Samsung and Hana ― were found to have provided incorrect financial data regarding their customers’ year-end tax readjustment to the National Tax Service.

Furthermore, industry officials said the NTS’ system was unable to filter the submitted data and detect the faults.

The four firms had submitted erroneous figures to the NTS’ automatic tax revision system, estimated to involve some 2.9 million credit card users and 163 billion won ($151 million) in transactions.

Credit card operators are required to classify their customers’ card usage into detailed categories ― such as general use, transportation expenses, traditional market usage ― before handing over the information to the auto tax revision system.

Once registered in the system, the data cannot be easily corrected as the NTS does not implement a secondary revision.

Mistakes most often occurred in public transportation fees and traditional market expenses as many member stores were not properly listed by their trade, according to NTS officials.

Some of the erroneous data remained accessible on the NTS database for over a week, leading taxpayers to miscalculate their tax refund amount.

The four credit card companies sent out apologies to customers and submitted a revised set of data to the NTS.

But most employees already submitted their tax revision documents last week. In such cases, those whose credit card usage had been miscalculated may have to redownload their data from the NTS system and replace their already-submitted data.

“Financial companies are liable for withholding but once they make mistakes, such as in this case, the actual damages are forced upon financial consumers,” said an official of the Korea Federation of Taxpayers.

“The central offices need to revise and refine the current tax compliance process.”

By Bae Hyun-jung (tellme@heraldcorp.com)