 |
| National Tax Service Commissioner Han Sung-hee answers questions from lawmakers at his confirmation hearing at the National Assembly on June 26, 2017. Korea Times file |
By Park Hyong-ki
The National Tax Service (NTS) said Thursday it will not audit the books of 5.69 million self-employed and small business owners until the end of next year.
This will let them focus on running their operations without having to worry about tax investigations. The move comes as they increasingly face hardship amid a weak economy and rises in the minimum wage.
Earlier this week, President Moon Jae-in called on his staff to immediately come up with measures to help deal with their problems.
"The President asked for measures that can reduce the tax burden on the self-employed given their difficult situation," Cheong Wa Dae spokeswomen Ko Min-jung told reporters.
"He felt extremely uneasy about their incomes being lower than those of salaried workers even though self-employed businesses are the backbone of the economy."
NTS data showed the rate of self-employed businesses closing in their first year reached nearly 88 percent in 2017, and is expected to surpass 90 percent this year
The tax agency said it will fully suspend auditing the books of 5.19 million self-employed running clothes shops, restaurants, motels and other types of retail services with annual sales of less than 600 million won.
They account for nearly 90 percent of the 5.87 million self-employed, the NTS noted.
The 5.19 million do not have to report their incomes and file taxes at all until the end of 2019.
Those who have already gotten an audit notice from the NTS can ask the tax agency to delist them from its regular checks.
"We expect this will help them get back up and sustain their businesses," an NTS official said.
Some 500,000 small firms, either with annual sales of between 1 billion won and 12 billion won or having less than 10 employees, do not need to file their corporate taxes, but they will not receive full exemptions from audits as the self-employed, it noted.
The group accounts for more than 70 percent of the total number of corporations.
In other words, they will be "temporarily exempted" from filing their incomes until next year.
Those who run real estate agencies, law and accounting firms, medical centers, night clubs and bars will have to report their earnings to the NTS as usual, it added, noting they are "not considered part of the group that need economic assistance."
It warned that if the tax authorities receive tips or suspect that the self-employed and small businesses are cooking their books to avoid paying taxes in the future, they will face harsh punishment.
But it added the NTS will give "favorable and preferential treatment" to those who actively hire young people.
In 2017, 17,200 small businesses created 52,000 jobs, up from 9,292 creating 35,000 jobs, according to NTS data.
The NTS will run a separate system for tech venture startups, enabling them to receive different kinds of support and exemptions.
"This would ultimately help them build and rebuild their businesses even after failures," said the NTS official.
![[INTERVIEW] 'Growth slowdown can accelerate depletion of retirement pension fund'](https://img.koreatimes.co.kr/upload/thumbnailV2/1b8c230b7aa14896bf5b639acd01a9ee.jpg/dims/resize/178/optimize)
![[INTERVIEW] Veteran US photographer gives environment 'visual voice' to chronicle climate change](https://img.koreatimes.co.kr/upload/thumbnailV2/9d491d25431d4e9b980fee78427589dc.jpg/dims/resize/178/optimize)
