[fn Editorial] Arrears amounting to 110 trillion, strictly punish tax evasion to realize tax justice

The National Tax Service announced that it will conduct a full-scale investigation into the arrears amounting to 110 trillion won. It plans to create a position called 'Status Confirmation Worker' to request data submission or confirm the payment intention and plan of defaulters. To this end, a basis for confirming the status of defaulters was prepared in the '2025 Tax Reform Plan'. The National Tax Service announced that it would immediately establish a dedicated organization called the National Tax Arrears Management Team.

The cumulative arrears increased from 99 trillion 900 billion won in 2021 to over 100 trillion won in 2022 (102 trillion 500 billion won), and then to 110 trillion 700 billion won last year. Compared to last year's national tax revenue of 336 trillion 500 billion won, this is an enormous scale reaching one-third. From the perspective of the general public, it is difficult to understand that the scale of arrears is this large, and it is also hard to comprehend why public authority was not exercised strongly until it reached this point.

Not paying taxes is a de facto violation of the law, as it fails to fulfill the basic duty of citizens to pay taxes. Intentional tax arrears are, in other words, tax evasion. Failing to report taxes is also tax evasion, but not fulfilling the payment obligation even after receiving a tax notice is the same tax evasion act. There are also regulations that allow intentional arrears to be punished with criminal penalties. If intentional arrears, property concealment, or evasion are recognized as illegal acts, imprisonment of up to three years or a fine of up to 30 million won can be imposed according to the Tax Offenders Punishment Act.

However, the government's response has always been lukewarm. Every year, the government announces measures similar to this year's to collect unpaid taxes, but the results have been extremely minimal. Of course, most of the arrears are likely due to business failures, making it difficult to pay taxes. However, there are certainly not a few people who intentionally do not pay taxes despite having the financial means. The government has not even been able to grasp the actual situation of how much intentional arrears exist.

If taxes are intentionally avoided, a moral hazard problem naturally arises in relation to those who pay faithfully. Particularly, from the perspective of income tax payers, often referred to as 'glass wallets', it becomes inevitable to question what tax justice is. Among the 22nd National Assembly members-elect, 25 are defaulters, and the local government with the largest amount of arrears is Gangnam-gu, Seoul. What does this mean? It means that social leaders and the wealthy are more likely to avoid taxes. The arrears of foreigners are also a common problem. The local tax arrears of foreigners in Korea amount to 43.4 billion won.

Even when taxes are well collected, the government's collection administration should not stop, but in a situation where tax revenue holes amount to tens of trillions of won every year due to the recession, the role of the National Tax Service in collecting arrears is even more important. The country should not allow defaulters and tax evaders to live lavishly while struggling due to lack of money. The reason the tax crime rate is low in the United States is that it is strictly punished with criminal penalties. We should also revise related systems and laws to strictly manage and increase the level of punishment for arrears and tax evasion. There is no other answer.