The National Tax Service (NTS) has come up with measures to meet the 2013 target for tax revenues of 216.4 trillion won despite an expected drop caused by the effects of the sagging national economy.

In a policy briefing to President Park Geun-hye, the NTS announced a plan to raise the percentage of its tax collecting through tax audits, settling of taxes in arrears, and handling of data other than taxpayers’ voluntary filing of tax returns, which currently accounts for around 7 percent of annual tax revenues. The NTS expects it will turn to the non-voluntary tax collection methods to add an estimated 15 trillion won to tax revenues. 

Given the stark economic conditions, tax authorities’ tax probes and other non-voluntary tax collection methods will likely be concentrated on large-sized companies and self-employed high-income earners rather than on smaller firms. 

Tax authorities’ prospects for meeting a target of collecting tax revenues are uncertain in the wake of the effects of the slumping economy. 

Tax authorities’ collecting tax revenues in the first two months of this year ran a shortfall of 6.8 trillion won when carry-over tax revenues were factored in, reports showed. The government forecast the shortfall of tax revenues at an estimated 6 trillion won during the whole of 2013.

In keeping with the new government’s efforts to explore tax revenues in the underground economy, the NTS launched a massive tax probe into well-to-do persons, internet shop operators, and loan sharks suspected of tax evasion on April 4.

The number of tax investigators working on the current tax probe is 927, equivalent to about one-fourth of the nation’s total tax probe personnel employed by the tax authorities. 

Lim Hwan-soo, director general in charge of tax probes at the NTS, told reporters at a policy briefing that tax authorities were investigating 224 tax evasion cases. They included 51 wealthy people suspected of having illegally bequeathed large amounts to family members to avoid estate taxes or people suspected of having assets in bank accounts opened under other names; 48 people accused of offshore tax evasion; 117 loan sharks suspected of dodging taxes on the high interest rates they charge borrowers; and eight internet shop operators accused of evading taxes on goods they sell online.

The NTS has launched the tax probe into tax dodging suspects, as NTS Commissioner Kim Duk-joong has pledged to do upon his inauguration. 

Dir. Gen. Lim was quoted as saying that tax authorities were focusing on the main features of the underground economy: clandestine bank accounts, illegal transfers of wealth, offshore tax evasion, loan sharks, and internet gambling sites.

Lim said some suspected of tax evading have gone too far. A parts company owner and founder was suspected of having paid nothing in capital gains tax after putting 21 billion won into long-term insurance products opened in his children’s names at the same time and transferring 18 billion won in cash he obtained by disposing of his real estate to his children. He was found to have handed over high-priced machinery to his subsidiary CEO, his eldest daughter, after receiving tax exemption on it. Lim said tax authorities imposed a 61.3 billion won penalty on the man for tax evasion, including 19.1 billion won in gift taxes to children and 35.1 billion won in corporate tax. 

NTS Commissioner Kim said in a parliamentary confirmation hearing in March that an estimated 6 trillion won could be collected from tax dodgers once the NTS has direct access to the Financial Services Commission’s Financial Intelligence Unit data. 

Lawmakers and legal pundits as well as economic organizations have voiced worries over the possible misuse of the financial transactions data.