As of the end of June this year, national tax arrears have surpassed 116 trillion won. Late payment penalties incurred due to delayed tax payments have also exceeded 21 trillion won from 2021 to July of this year. The penalties, which are imposed when taxpayers fail to pay by the deadline set by the tax office, exceeded 2.6 trillion won last year and continue to rise this year.
On October 11, according to data received from the National Tax Service by Kang Min-guk, a member of the National Assembly's Finance and Economy Committee, the cumulative national tax arrears as of the end of June amounted to 116 trillion and 31 billion won, with a total of 5,642,792 cases of arrears.
National tax arrears have increased annually, rising from 99 trillion and 86.07 billion won in 2021 to 102 trillion and 51.40 billion won in 2022, surpassing 100 trillion won. The figures continued to grow, reaching 106 trillion and 59.7 billion won in 2023, 110 trillion and 73.10 billion won in 2024, and 114 trillion and 96.9 billion won last year.
By tax category, the highest arrears were in value-added tax, totaling 33 trillion and 44.31 billion won. Income tax followed with 27 trillion and 43.05 billion won, while capital gains tax reached 13 trillion and 38.71 billion won, corporate tax was 11 trillion and 29.80 billion won, inheritance and gift tax totaled 3 trillion and 36.81 billion won, and comprehensive real estate tax was 1 trillion and 74.40 billion won.
As arrears increase, the burden of late payment penalties is also growing. From 2021 to July of this year, the cumulative late payment penalties amounted to 21 trillion and 62.61 billion won, with a total of 24,141,504 cases recorded.
For taxes such as income tax, corporate tax, and value-added tax, taxpayers are responsible for reporting and paying their own taxes. If they fail to pay or underpay by the legal deadline, penalties are applied even before the tax office issues a notice.
The annual penalty amounts have increased, with 3 trillion and 65.52 billion won in 2021, 3 trillion and 82.02 billion won in 2022, and 4 trillion and 16.14 billion won in 2023. In 2024, the amount decreased to 3 trillion and 81.04 billion won, but rose again to 4 trillion and 10.17 billion won last year. From January to July of this year, the provisional new penalty amount is 2 trillion and 77 billion won.
Late payment penalties incurred after the tax office issues a notice have also increased. They rose from 702.1 billion won in 2021 to 1 trillion and 132.9 billion won in 2022, then to 1 trillion and 616.6 billion won in 2023, and 2 trillion and 137.5 billion won in 2024. Last year, they increased to 2 trillion and 656.6 billion won, and from January to July of this year, 1 trillion and 735.9 billion won were imposed.
Kang Min-guk stated, “The rapid increase in national tax arrears and the scale of penalties reflects the prolonged reality of sluggish domestic demand and highlights the limitations of the National Tax Service's tax collection methods.” He added, “National tax arrears will not resolve themselves over time, so the National Tax Service needs to shift its focus from imposing penalties to managing the speed of arrears and penalties, and develop strategies to address the issue.”
The National Tax Service commented, “Late payment penalties tend to increase based on the scale and duration of the arrears,” and stated plans to strengthen on-site management of arrears through the operation of an arrears management team to manage long-term arrears more systematically.
* This article has been translated by AI.
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