NTS probing 28 individuals with paper companies

The National Tax Service said Tuesday that it launched an additional probe into 10 people who allegedly evaded taxes by setting up paper companies abroad.

This brings the total to 28 people currently under scrutiny by the tax auditor that is tracking down tax evasion via ghost companies.

The NTS has so far levied additional taxes worth 71.4 billion won ($65.2 million) against 11 people who were found to have not reported their tax-haven deposits to the authority since the beginning of the second half of this year.

The tax regulator has acquired a list of 405 people believed to be Korean nationals holding offshore accounts via tax havens such as the British Virgin Islands and the Cayman Islands.

It narrowed down the list to 267 identified Koreans with such accounts, and found that 39 of them allegedly failed to properly report their tax-haven assets and pay taxes to the authority, the NTS explained.

The state auditor said that its list included mostly executives of conglomerates and their family members. Executives from manufacturing finance and retail made up the biggest share on the list.

Chun Jae-kook, the eldest son of former President Chun Doo-hwan, is also on its list of 267, but the NTS refrained from disclosing whether it is investigating him.

The NTS said it levied an additional 601.6 billion won in tax against 127 offshore account holders who were found to have evaded taxes in the first half of this year.

This is an increase of about 23 percent compared with the same period a year ago when the NTS imposed an additional 489.7 billion won tax against 105 unreported account holders, it noted.

The tax auditor said it will continue to strengthen its investigation against those allegedly to be hiding their assets via offshore accounts through close collaborations with foreign and domestic regulators.

The agency’s toughened stance against offshore account holders comes as it seeks to help the government make up for a shortfall in tax revenue, and back its efforts to come up with funds to finance welfare expansion.

Uncovering unreported offshore accounts is part of the NTS’ drive to normalize taxation of such account holders and the self-employed in the underground economy.

In addition to raising taxes of workers with an annual salary of more than 55 million won, the Ministry of Strategy and Finance is seeking to secure 27.2 trillion won by levying taxes on the shadow market.

The Park Geun-hye administration seeks to raise 135 trillion won for welfare projects.

By Park Hyong-ki (hkp@heraldcorp.com)