The National Tax Service said on the 9th that it will launch tax audits into 14 food and daily-goods companies, including Daehan Flour Mills, widely known for its "Gompyo" flour; Sempio Food Company, a maker of "brewed soy sauce"; and, among sugar sellers, Samyang Corporation.
The National Tax Service said that it is launching tax audits into corporations suspected of tax evasion that are causing anxiety over grocery prices ahead of the Lunar New Year holiday. Since September, it has been conducting back-to-back tax audits of consumer-goods corporations that inflated expense to underreport taxes and raised product prices, increasing the burden on consumers.
Daehan Flour Mills is one of six milling companies indicted by prosecutors earlier this month on suspicion of collusion in violation of the Fair Trade Act. According to the National Tax Service, from January 2020 to October last year, Daehan Flour Mills colluded with competitors to raise prices of major flour products by 44.5%. Daehan Flour Mills was found to have gained at least 80 billion won in profit from the collusion.
The National Tax Service believes that Daehan Flour Mills used such profits to overpay more than 7 billion won in labor costs to the founder's family. It also found that the company provided improper support by purchasing 1 billion won worth of processed foods at high prices from an affiliate and not collecting 8 billion won in trademark royalties from another affiliate.
Daehan Flour Mills was newly found to have covered, as company expenses, the funeral costs of the honorary chair and the repair costs for sports cars owned by the founder's family.
Sempio Food Company, a corporation well known for brewed soy sauce, saw operating profit jump 282% last year to 24.7 billion won. The holding company Sempio also saw operating profit rise 314% to 24.3 billion won. This was thanks to raising prices of major products by 10.8% despite a drop in materials and supplies costs.
However, the National Tax Service believes Sempio unfairly distributed profits from the price hikes to the founder's family. It suspects Sempio paid more than 7 billion won in excessive event expenses to an affiliate headed by the founder's child and purchased packaging containers at prices over 2 billion won higher than appropriate, among other methods.