Gyeonggi Province's Dedicated Violation Investigation Unit Catches 103 Tax Cheaters Over 3 Years

[Suwon Ilbo=Reporter Park No-hun] Gyeonggi Province announced on the 15th that through its dedicated violation investigation unit since 2017, it has investigated 24 local tax evaders, 41 delinquent tax payment evaders, 11 cases of identity lending, and 27 other cases, detecting a total of 103 violators as of September this year and referring them to prosecution.

Gyeonggi Province is the only local government nationwide operating a dedicated local tax violation investigation unit consisting of 6 members. Violation investigation refers to tax officials being designated by the chief prosecutor of the local prosecution office to directly interrogate delinquent taxpayers or conduct search and seizures. When violations are detected, fines can be imposed or cases can be referred to investigative authorities.

Looking at cases handled by the dedicated unit, an agricultural corporation A in Ansung City purchased 307,437 square meters of forest land in Ansung City for 3.7 billion won across three transactions from 2018 to last year, then divided and sold shares to 33 individuals to pocket 3.1 billion won in profits. Not stopping there, the entity falsely reported already-sold land as if it were being farmed and improperly received a 74 million won reduction in acquisition tax, only to be caught by the dedicated unit's investigation and referred to prosecution.

Delinquent taxpayer B, despite owing hundreds of millions of won in local taxes, operated entertainment establishments under his spouse's name and drove multiple luxury foreign cars, leading a lavish lifestyle, until detected and referred to prosecution.

Additionally, the dedicated unit has continuously conducted legal improvement research for relevant laws including the 'Local Tax Basic Act' that forms the basis for violation investigations, and submitted several recommendations to the relevant ministry, the Ministry of the Interior and Safety.

As a result, new regulations were established granting prosecution authority to heads of metropolitan governments in cases where cities and counties jointly investigate violations related to city and county taxes with provincial assistance. Previously, even when cities and counties jointly investigated violations related to city and county taxes with assistance, prosecution authority remained only with cities and counties, making smooth follow-up handling difficult.

Furthermore, the province improved relevant regulations by creating new 'local tax violation investigation notification forms' and applying them in the field, contributing to reducing taxpayer errors. According to the 'Enforcement Rules of the Local Tax Basic Act,' results of violation investigations and tax investigations must be notified to taxpayers in writing. However, in the past, since the subjects and procedures of the two investigations differed, identical forms were used for result notifications, frequently causing taxpayer confusion.

Recently, a partial amendment bill to the 'Local Tax Basic Act' containing contents suggested by the province has been proposed and awaits passage. The amendment includes violation investigation in confidentiality exceptions when local governments request tax information from one another, enabling smooth cooperation and substantive investigations. This is expected to make the province's violation investigation activities more active.

Choi Won-sam, director of Gyeonggi Province's Tax Justice Division, said, "Violation investigation is a powerful tool to inform people that they may face criminal punishment when improperly receiving local tax reductions or evading payment of delinquent taxes," and added, "We will make greater efforts in continuous legal improvement and realizing tax justice through punishment of local tax evaders."