1,186 Habitual Defaulters Caught Attempting to Receive National Tax Refunds While Evading Fines

[Suwon Ilbo=Reporter Park No-hun] Habitual defaulters who failed to pay administrative fines while attempting to collect national tax refunds, including value-added tax and comprehensive income tax, were caught in a Gyeonggi Province investigation and had all refund amounts seized.

From March to June, Gyeonggi Province conducted a comprehensive investigation of 6,789 individuals among those who defaulted on non-tax revenue of 5 million won or more, including administrative fines, who were eligible for national tax refunds including comprehensive income tax. The investigation discovered that 31.4 billion won in national tax was scheduled to be refunded to these individuals.

Accordingly, the province immediately seized and collected 260 million won in national tax refunds from 1,186 individuals after conducting a practical analysis that excluded pre-seizure amounts.

In a major case, a resident of Guri City identified as Mr. A claimed to have no money and failed to pay four administrative fines totaling 1.66 million won for violating the Automobile Damage Compensation Guarantee Act since 2006, but the investigation found that 1.35 million won in national taxes were scheduled to be refunded.

Accordingly, the province seized the entire refund amount and collected it by force, requiring payment of the remaining balance in installments.

A resident of Osan City identified as Mr. B failed to pay 2.68 million won in road usage fees last year and was unreachable, but the province discovered and collected 1.99 million won in national tax refunds. Mr. C of Paju City habituated to not paying road usage fees and other charges since 2019, which accumulated to 2.88 million won, leading to seizure of automobiles and real estate. The province seized national tax refunds in this investigation and collected the entire unpaid amount.

The province explained that the national tax refund system is not linked with the non-tax revenue collection computer system of local governments nationwide, and the securing of receivables depends on preemptive investigation and swift seizure measures.

Accordingly, the province requested the Ministry of the Interior and Safety to establish a computer system that would allow immediate seizure and collection of national tax refunds for non-tax revenue defaulters just as it does for other local tax defaulters.

Kim Min-kyung, head of the Tax Justice Division of Gyeonggi Province, said, “In the case of habitual defaulters, there is a low probability that they will receive national tax refunds and use them to pay their arrears,” and added, “We will do our best to realize tax justice by strengthening collection activities through thorough default administration.”