tax agency-investigation

SEOUL, April 4 (Yonhap) -- South Korea's tax agency said Thursday that it has launched an investigation into 224 people, including entrepreneurs and loan sharks, on suspicion they were involved in evading taxes through various methods.

This move is in line with the government's stepped-up efforts to regularize the so-called underground economy, where illegal and unregulated business activities are taking place. It is partly aimed at securing money to meet the growing financial need for its expanded welfare programs.

The National Tax Service (NTS) said that it is conducting the investigation into 51 rich people for accumulating wealth through shady methods, 48 individuals suspected of evading taxes by concealing money overseas, 117 loan sharks and eight other people who evaded taxes using Internet cafes.

For this investigation, the NTS has mobilized nearly 1,000 personnel over the past month with a focus on cracking down on overseas tax evasion attempts and business activities taking place in the underground economy.

Sources said some business people are also subject to the investigation. They include an owner of one of the country's top 100 conglomerates, though his or her name was not disclosed.

Many of them are suspected of inheriting or transferring their wealth through such methods as launching fake subsidiaries or concealing wealth in borrowed-name accounts.

The NTS is also closely analyzing the data it received from other countries in order to confirm whether any tax evasion took place through secret overseas accounts, its officials said.

This investigation is the largest ever launched under President Park Geun-hye's government, which was inaugurated in late February. Last year, the NTS probed 771 wealthy people, which resulted in collecting additional taxes of 1.12 trillion won (US$996.3 million).

In its policy report to the president on Wednesday, the agency said that it will beef up its crackdown on tax evasion especially among high-income earners, conglomerates and entrepreneurs.

It also said that regularizing the underground economy could result in additional tax revenues of 28.5 trillion won over the next five years.

President Park said that she will regularize the underground economy in a bid to raise money necessary to make good on her campaign pledges, including expanded welfare programs. Experts estimate that the government will need about 135 trillion won over the next five years to fulfill those campaign promises.

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