It was learned on the 28th that the Ministry of Planning and Budget is pushing a plan to set up a separate fund to expand the resources for "reporting rewards." It started with an order from the president.
President Lee Jae-myung posted on X (formerly Twitter) on Feb. 25, "Now, if you report stock price manipulation, you can receive tens of billions, hundreds of billions of won as a reward. It's certainly easier than the lottery to turn your life around." He said this while praising the Financial Services Commission for raising the reporting reward for stock price manipulation to up to 30% of the illicit gains with no cap. He also said, "We will consider paying rewards even to participants (in stock price manipulation)," signaling additional measures.
The day before, on Feb. 24, the president also said at a Cabinet meeting, "If (collusion is) reported, give a big enough reward to change a life, to turn one's fate." He continued, "If (someone reports) a 400 billion won collusion case, give several tens of billions of won," adding, "Make it so shocking that people think, instead of playing the lottery, let's dig into collusion."
Reporting rewards are paid to citizens who report illegal acts carried out covertly. The aim is to encourage whistleblowing. But there has been criticism that the reward amounts are too small to achieve their intended purpose. For example, if corporations or individuals engaged in tax evasion are reported to the National Tax Service, a tax evasion tip-off reward of up to 4 billion won can be received. Last year, 20.8 billion won in tax evasion tip-off rewards was paid for 516 reports. That is an average reporting reward of 40.31 million won per report. A government official said, "Considering that people might suffer retaliation for reporting, one could say the reward is not sufficient."
The analysis is that this happens because reporting rewards are paid from each ministry's budget. Even when a reward needs to be paid, it is hard to do so if the budget runs short. In fact, the Korea Fair Trade Commission cut other project expenses, such as research services, when it lacked funds to pay rewards to reporters from 2021 to 2023. Also, even if a reporting reward budget remains in a given year, it is difficult to carry it over to the next year.
Amid these circumstances, President Lee Jae-myung repeatedly ordered a significant expansion of reporting reward payments. As a result, the Ministry of Planning and Budget is said to be reviewing a plan to set up a separate fund to expand the resources for reporting rewards.
A fund can be operated more flexibly than a budget. If a fund is created as a common resource for reporting rewards paid by all ministries, it is relatively easier to secure resources even if the current caps on reporting rewards are raised or new rewards are introduced in the future. Currently, when a ministry runs out of reporting reward money, it cannot use another ministry's reward funds, but with a fund, this approach would become possible. Changing expenditure items is also easier than it is with a budget.
Before establishing a separate fund to secure resources for reporting rewards, the Ministry of Planning and Budget plans to first assess the current situation. It is said that the types of reporting rewards scattered across ministries and the budget size for each reward are not currently compiled.
Creating a new fund also requires legislative action. The Ministry of Planning and Budget plans to prepare a bill by August, pass it through the National Assembly, and reflect the fund related to reporting rewards in next year's budget bill.