EDITORIAL from the Korea Herald on Oct. 24

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Tax office reform

The National Tax Service is by reputation one of the government agencies through
which the Blue House wields its power, along with the intelligence agency and the
prosecutors' office. Worse, the NTS has in the past been plagued by corruption.
On his parliamentary confirmation hearing, Baek Yong-ho, as tax commissioner
nominee, promised to reform the NTS and spruce up its bad image. He said he would
transform the power-wielding agency into a public-serving one.
Baek, an economist by training, observed his 100th day as new tax commissioner
yesterday. It is then an appropriate time to review what he has done since he
promised reform and reflect on what he needs to do in the months ahead.
Competition for promotions or transfers to coveted posts is no less fierce at the
20,000-strong NTS than at any other government agency. Its officials engage in
cutthroat competition for 350-odd posts as regional tax office heads and higher
positions.
No wonder those eligible for promotion and transfer have sought to exploit all
means available to advance their career, including hometown and school
connections. One outrageous case involved a former tax commissioner, who was sent
to prison for taking money from an official on a promise to promote him.
Quite a few senior NTS officials, including two more tax commissioners, have also
been sent to prison for taking bribes.
At his inauguration, Baek promised merit-based promotions and transfers and
warned against lobbying for them. Then he set up a commission to evaluate the
competence and performance of those eligible for promotion and transfer. He also
brought in an outsider as the auditor, who he apparently thought would be given a
freer hand than an insider when it came to housecleaning.
Last week, he made good on his promise when he promoted and transferred 52
officials. He said he excluded from the transfers and promotions six candidates
in whose favor Baek said politicians and other influential people had attempted
to exercise their influence.
It is necessary to establish a transparent process of selecting candidates for
promotion on the basis of their competence and performance. But much more needs
to be done if the NTS wishes to be seen as an agency that serves the public,
shedding its ugly image of conducting tax audits on the orders of the powers that
be.
True, it is necessary for the NTS to audit corporations suspected of
underreporting their profits in order to amass slush funds or of dodging taxes
outright. But it should keep itself away from the temptation to conduct tax
audits in an attempt to tame outspoken corporations or out of vengeance against
those that had connections with previous administrations, as has often been the
case in the past.
Baek promised to audit large corporations every four years, while refraining from
conducting unscheduled audits and to stop auditing them when the auditors are
suspected of infringing on their rights as taxpayers. It is not just Baek, but
his successors as well, that will have to make good on the promise not to abuse
the tax office's powers.
This is not to say that the NTS should be lenient on tax dodgers. Its primary
mission is to assess, levy and collect taxes, which constitute the lion's share
of public funds. It will have to redouble its efforts to boost tax collection,
given that tax revenues fell short of the target in the first half of this year.
The NTS will have to conduct tax audits on the legal, medical and other
professions and the high-income self-employed that are suspected of
underreporting their incomes. According to a recent report from National Health
Insurance Corp., four out of every 10 professional offices, such as law firms,
clinics and pharmacies, underreported the incomes of their members.
(END)