In 2023, South Korea's most populous province, Gyeonggi, collected millions of dollars from tax evaders by tracking crypto assets on multiple centralized exchanges.
According to a report in local media Yonhap News, the Gyeonggi Provincial Tax Judiciary Bureau used a special electronic management system to track the virtual assets of delinquent taxpayers to collect 6.2 billion won (approximately $467 million) from tax evaders. Undeclared taxes were collected.
Gyeonggi Province collects $4.6 million in delinquent taxes
Before the Gyeonggi government introduced tracking software last year, lists of violators were typically sent to virtual currency exchanges to check membership registration on the platform. Ultimately, the crypto assets of delinquent taxpayers will be seized and sold to pay undeclared taxes.
Unfortunately, the manual process took approximately six months, as the criminal's official documents were exchanged individually.
The new management system has reduced the process time to approximately 15 days. Authorities are using the resident registration numbers of delinquent taxpayers to track their phone numbers on virtual currency exchanges. The software handles asset tracking, seizure, sale and tax collection once the criminal details are entered into the system.
The Gyeonggi Province government has significantly improved the success rate of identifying delinquent member registrations at virtual currency exchanges by using a new system.
Promoting cooperation with virtual currency exchanges
Additionally, with the new system, the ministry has confirmed that approximately 5,910 people who are delinquent in taxes worth 3 million won (approximately 2,200,000 yen) are operating cryptocurrency wallets containing multiple assets, including Bitcoin (BTC). I discovered something. Additionally, the government was able to collect 6.2 billion won ($4.67 million) from about 2,390 people.
“We will continue to take strong collection measures against those who are maliciously delinquent, such as those who do not have the funds to pay taxes or trade crypto assets.'' Roh Seung-ho, director of the Provincial Tax Bureau, said, “We will protect honest taxpayers. “We will do our best to achieve fair taxation.”
In response to this situation, Gyeonggi Province is promoting cooperation with virtual currency exchanges, while also seeking enforcement measures against platforms that do not respond to inquiries.
Meanwhile, South Korea's ruling People Power Party is calling for a two-year postponement of taxation on cryptocurrency investment profits, citing the lack of a regulatory framework in place to ensure a strong tax base.
