Gyeonggi Province Recovers $4.6M in Taxes Using Digital Cryptocurrency Tracking System
Summary:
South Korea's Gyeonggi province implemented a digital tracking system, tracing mobile phone numbers to detect tax evaders' crypto accounts and recovered non-declared taxes amounting to 6.2 billion won (around $4.6 million) in 2021. The Financial Intelligence Unit (FIU) is also encouraging crypto exchanges to report suspicious transactions. The government updated the Virtual Asset Users Protection Act in February, including severe punishments for violations, such as long-term imprisonment and hefty fines.
In South Korea, Gyeonggi province's Tax Justice Department, which is the most populated, collected non-declared taxes amounting to 6.2 billion won (around $4.6 million) in 2021. This became possible by employing a digital tracking system to trace crypto accounts used for tax evasion. According to Yonhap News Agency, they used resident registration information for those outstanding taxpayers, seeking out their mobile numbers to locate their virtual asset exchange accounts. This innovative tracking system is a significant upgrade from the former method where tax authorities had to seek information from crypto exchanges individually. Earlier, communication and document sharing would take up to six months, but with the digital management system in place, the process is now shortened to an approximate 15 days.
By leveraging this system, the tax body found 5,910 individual crypto accounts, each owing over 3 million won ($2,200) in local taxes. From these, a total of 6.2 billion won ($4.6 million) was recovered from 2,390 defaulters. The intention of the province is to enhance cooperation with virtual asset exchanges and evaluate administrative measures for non-cooperative platforms. Noh Seung-ho, the head of the Provincial Tax Justice Department, assured they would carry on with strict collection activities against devious defaulters, such as those trading in virtual assets while claiming they lack funds to pay taxes.
Meanwhile, the Financial Intelligence Unit (FIU) is also urging crypto exchanges to report any suspicious transactions linked to money laundering and illicit "FOREX outflows." Alongside this, they are planning on launching a "virtual asset analysis system" to monitor and analyze transaction details and convoluted money movements.
In February, the South Korean government updated the Virtual Asset Users Protection Act, including severe punishments and monetary fines for violations. These could range from imprisonment exceeding a year to fines up to five times the illegal profit made. Offenders generating over 5 billion won ($3.8 million) through illicit crypto trading could even face life imprisonment.
Published At
2/22/2024 11:51:16 AM
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