(Sejong = Yonhap News) Reporter Daehee Lee = It was revealed that the largest number of borrowed-name accounts for business owners detected by the National Tax Service from last year to July of this year were opened at NH Nonghyup Bank.
Looking at the 'Financial Company Details Reporting Borrowed Name Accounts' that People Power Party lawmaker Kang Min-guk received from the National Tax Service on the 4th, a total of 3,471 business borrowed name accounts were reported and discovered from 28 financial companies from last year to July of this year.
By financial company, accounts opened at NH Nonghyup Bank accounted for the largest number at 703.
Kookmin Bank followed with 497 cases, Agricultural Cooperatives Cooperatives with 471 cases, and Shinhan Bank with 319 cases. These four places accounted for a total of 1,990 cases, or 57.3% of the total.
After that, there were 277 cases of Industrial Bank of Korea [024110], 270 cases of Woori Bank, 241 cases of Kakao Bank [323410], 185 cases of Hana Bank, 91 cases of iM Bank, and 85 cases of Saemaeul Geumgo.
Representative Kang Min-guk pointed out that while the number of reports and detections by the National Tax Service regarding borrowed-name accounts, which are the main means of tax evasion for high-income self-employed people, is decreasing, the management of the borrowed-name account reporting operation system is also poor.
The total number of borrowed-name accounts reported to the National Tax Service over the seven years from 2020 to July of this year was 78,398.
Reports are decreasing after peaking in 2022, including 12,568 cases in 2020, 10,743 cases in 2021, 13,988 cases in 2022, 12,961 cases in 2023, 12,769 cases in 2024, and 10,739 cases last year.
The number of cases used for tax purposes, such as tax audits or written confirmations, after reporting a borrowed-name account was 24,648 cases over the past seven years, or 31.4% of the reported amount.
The number of tax utilization cases also decreased every year, from 6,245 in 2020, 4,456 in 2021, 4,163 in 2022, 3,519 in 2023, 2,794 in 2024, and 2,698 last year.
The National Tax Service pays a reward (1 million won per case) to the reporter if the confirmed additional tax amount is more than 10 million won among reports related to borrowed-name accounts.
The total number of rewards paid over the past seven years was 7,488, and the total amount of rewards was 7.486 billion won. Among reports on borrowed-name accounts, the proportion of rewards paid was 9.6%.
The number of rewards paid fell from 1,784 cases (KRW 1.782 billion) in 2020 to 704 cases (KRW 704 million) in 2024, but increased slightly to 769 cases (KRW 769 million) last year.
Rep. Kang criticized that the National Tax Service does not separately manage the results of searching for borrowed-name accounts for all businesses, and does not separately retain or manage the status of financial companies even though the borrowed-name account number and name of the financial company are listed when reporting.
It was added that the details of reported financial companies from last year to July of this year were also compiled at the request of Rep. Kang's office.
Rep. Kang pointed out, “It is absurd to simply attribute the decline in the number of reports of borrowed-name accounts to the decline in economic activity due to COVID-19 and the efforts of the National Tax Service while not managing or even retaining the valuable borrowed-name account information reported by the public.”
He went on to say, “Not only is there a risk that borrowed-name accounts may be abused as a means of tax evasion, such as missing sales, but there is also a high possibility of problems arising in terms of taxation fairness with honest taxpayers.” He added, “The National Tax Service must increase the reward and come up with an active promotional plan to eradicate borrowed-name accounts and encourage reporting.”
The National Tax Service explained, “We accurately manage individual reporting information, but we do not manage this as separate statistics for each financial company,” and added, “We will seek various measures to eradicate the use of borrowed-name accounts.”
