(Sejong = Yonhap News) Reporter Daehee Lee = The National Assembly pointed out that the national tax arrears for livelihood purposes, which increased during COVID-19, have not been resolved and are prolonging.
According to data received from the National Tax Service by Rep. Min Byeong-deok of the Democratic Party of Korea on the 11th, the number of new national tax delinquencies that arose between 2020 and 2022 during the COVID-19 period amounted to 9,566,600 cases, amounting to 61.91 trillion won.
The new arrears increased every year to KRW 19.2364 trillion in 2020, KRW 19.6711 trillion in 2021, and KRW 22.9935 trillion in 2022.
Rep. Min pointed out that the problem is that arrears, which have rapidly increased during the COVID-19 period, are not resolved over time and are accumulating.
The national tax 'arrears pending settlement' increased by approximately 2.5 times in five and a half years from KRW 9.5284 trillion in 2020 to KRW 24.1127 trillion in June this year.
Arrears in liquidation are arrears that are judged to have a high possibility of collection, and are distinct from liquidation holds, which temporarily suspend collection because it is recognized that collection is not possible.
During the same period, the number of people in arrears during reorganization increased from 864,107 to 1,002,348.
In particular, Representative Min analyzed that business failure and income decline during the COVID-19 period were likely to have led to long-term delinquency among the middle-aged and elderly.
Comparing 2021 and June of this year, the amount of arrears during reorganization for those in their 60s increased 2.7 times from 1.2377 trillion won to 3.2883 trillion won, and for those in their 70s or older, it increased 2.8 times from 615.4 billion won to 1.7127 trillion won. This is a steeper increase than the total (2.1 times).
The amount of arrears among those in their 50s was 4.32 trillion won, the highest among age groups, and 1.9 times the amount in 2021 (2.287 trillion won).
An increase in delinquency was also observed in industries that were directly affected by COVID-19.
The amount of arrears in the accommodation industry's value-added tax settlement increased 3.9 times from 12.8 billion won to 50.5 billion won during the same period.
The retail industry increased from 210.7 billion won to 579.1 billion won, the restaurant industry increased from 206.7 billion won to 471.1 billion won, and the service industry (including others) increased from 1.0807 trillion won to 2.4266 trillion won.
However, the National Tax Service stated that it is difficult to accurately determine the prolonged status of self-employed self-employed people's tax delinquency that occurred during the COVID-19 period because it does not separately classify and manage national tax arrears by specifying self-employed people.
Rep. Min Byeong-deok pointed out, "It is highly likely that the self-employed and small business owners whose businesses collapsed during the COVID-19 period are still unable to escape the shackles of delinquency," and added, "Nevertheless, the National Tax Service's failure to separately manage the delinquency status of self-employed individuals is neglecting a policy blind spot."
Representative Min also emphasized the need to further strengthen the National Tax Service's currently operating special provisions for collecting arrears for small individual business owners and the system for extinguishing the obligation to pay arrears for subsistence-type delinquents.
He said, "Delinquency is not a simple problem of non-payment of taxes, but a problem of people's livelihood that leads to business closure, failed re-startup, and difficulty making a living." He suggested, "We need to separately identify the prolonged status of livelihood-type delinquency that occurred during the COVID-19 period and substantially expand the delinquency settlement, payment deferral, and recovery support system for small individual business owners."
Accordingly, the National Tax Service said, "In a situation where the size of the economy is expanding, the rate of new delinquency occurrence is faster than the speed of resolution, so the scale of delinquency has expanded. This year, we will manage accumulated delinquency more systematically by strengthening field-centered delinquency management, such as operating a delinquency management team."
