South Korea’s National Tax Service Targets Integrated Revenue Collection System by Year-End
The National Tax Service (NTS) of South Korea announced a significant initiative on Thursday, aiming to centralize the collection of *all* government revenue. This strategic move expands its mandate beyond national taxes to actively manage overdue non-tax payments, including administrative fines, various penalties, and compensation fees.
To achieve this ambitious goal, the NTS plans to establish a comprehensive, integrated collection system by the close of the year. This new framework will consolidate the collection of delinquent revenue, a task currently fragmented across approximately 4,500 government offices throughout the nation.
Non-tax revenue encompasses a broad spectrum of 95 distinct categories, prominently featuring penalty surcharges, administrative fines, and critical compensation payments. While annual collections reach a substantial 258 trillion won ($169 billion), the amount of outstanding arrears remains significant at 16.2 trillion won. The agency’s data reveals concerningly low collection rates: 73 percent for penalty surcharges, a mere 40 percent for administrative fines, and a critical 22 percent for compensation payments.
These stark figures underscore the substantial volume of uncollected government revenue resulting from the current fragmented system, even though non-tax payments constitute a sizable and vital component of public finances.
This strategic shift is anticipated to dramatically enhance fiscal efficiency. The NTS will leverage its sophisticated tax collection infrastructure and extensive debtor data to more effectively recover overdue payments that numerous individual agencies have historically struggled to collect independently. Furthermore, NTS officials noted that this move towards integrated revenue collection aligns with a broader global trend, highlighting Norway’s adoption of a similar centralized system in January as a recent international precedent.
As a crucial preparatory step, the tax agency will commence status checks on 3.84 million delinquent debtors starting in July, laying the groundwork for the development of this new, tailored collection system.
During a press briefing held in Sejong on Thursday, NTS Commissioner Lim Kwang-hyun articulated the agency’s transformative vision: “The NTS will evolve beyond a traditional tax collection agency to become the Korea Revenue Service, entrusted with the responsibility for *all* government revenue.”
Commissioner Lim further clarified that a potential rebranding of the agency’s English name, from NTS to Korea Revenue Service, is currently under careful review and consideration, though it has not yet been finalized. He emphasized that any such significant change would necessitate thorough scrutiny and broad public consensus.
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