Suwon Collected 7.14 Billion Won in Evaded Taxes Through Tax Audits Last Year

[Suwon Ilbo=Reporter Jung Jun-sung] Suwon Special City announced on the 8th that it secured 7.14 billion won in tax revenues through tax audits last year. The collected amount increased by 28.8% (1.599 billion won) compared to 2023.

The city conducted regular tax audits on 135 corporations selected through deliberation by the 'Suwon Local Tax Review Committee' and collected 4.25 billion won, while discovering evaded and omitted tax sources through planned tax audits and collecting 2.89 billion won.

By tax category, acquisition tax accounted for the most at 4.735 billion won (66.3%), followed by local income tax of 1.21 billion won (16.9%), resident tax of 861 million won (12.1%), and other local taxes including local education tax of 334 million won (4.7%).

In regular tax audits, cases of 'underreporting' construction costs including option expenses and construction interest accounted for the most at 2.249 billion won (52.9%).

Additionally, corporations with headquarters in Seoul and other locations that reported real estate acquired within the overpopulation control zone at the general tax rate were assessed the 'metropolitan excess tax rate,' resulting in 704 million won (16.5%) in collections. 'Tax-exempt and reduction recoveries' amounted to 451 million won (10.6%), and others to 850 million won (20%).

Planned tax audits consisted of △large-scale construction site audits △real estate development company audits △research institute status surveys △corporate local income tax audits △deemed taxpayer audits, among others.

The city developed investigation techniques to identify 'unregistered business locations' in Suwon and conducted focused planned audits.

Using 'KISCIS (Construction Industry Knowledge Information System),' the city identified subcontractors that had withdrawn from construction sites and tracked and investigated planned real estate companies by checking job advertisements.

Last year, the city developed the 'Re:Search' investigation technique for the first time nationally and identified corporations evading local taxes. Using corporate research institute data to identify 'unregistered business locations,' the Re:Search technique uncovered 1.29 billion won in omitted local taxes.

Additionally, 252 million won was collected through 'deemed taxpayer acquisition tax audits.' Since controlling shareholders, typical deemed taxpayers, often fail to recognize their tax obligations, the city conducts annual investigations on corporations with changes in stocks and equity.

Last year, the city inspected 476 vehicles with expired lease contracts and additionally reviewed the acquisition tax field when leases terminate, which is paid by lease users. This was an investigation that managed acquisition taxes on vehicles acquired by facility rental companies (leasing companies) but registered under vehicle users' names, raising awareness of tax payment obligations.

Additionally, through 'correct local income tax filing guidance,' 157 million won was collected, and the city jointly conducted thorough investigations into local tax blind spots with Gyeonggi Province, collecting 1.189 billion won.

A city official stated, "By introducing diverse tax audit techniques to uncover evaded and concealed tax sources and securing stable tax revenues, we achieved good results," and added "Local tax audits are the most powerful mechanism to encourage honest tax payment." The official continued, "Going forward, we will support taxpayers' honest tax payment and prevent tax evasion through tax guidance."