On the 28th, it was learned that the Ministry of Planning and Budget is pushing a plan to set up a separate fund to expand resources for "reporting rewards." The trigger was a presidential directive.
President Lee Jae-myung on Feb. 25 posted on X (formerly Twitter), "Now, if you report stock price manipulation, you can receive tens of billions, even hundreds of billions of won, as a reward. It's definitely easier than the lottery to turn your life around." He said this while praising a measure by the Financial Services Commission to raise reporting rewards for stock price manipulation to as much as 30% of the illicit gains with no cap. He also noted, "We will consider paying rewards even to participants (in stock price manipulation)," signaling additional steps.
A day earlier, on Feb. 24, at a Cabinet meeting, the president said, "If (collusion is) reported, give rewards that will change a person's life, their fate." He continued, "If someone reports 400 billion won (worth of collusion), give them several tens of billions," adding, "Make it so shocking that people think, instead of buying lottery tickets, let's dig into collusion."
Reporting rewards are paid to members of the public who report illegal acts carried out in secret. The aim is to encourage whistleblowers to come forward. But there has been criticism that the reward amounts are too small to achieve their intended purpose. For example, if a tax-evading corporation or individual is reported to the National Tax Service, the reporter can receive up to 4 billion won as a tax evasion tip-off reward. Last year, 20.8 billion won in tax evasion tip-off rewards was paid for 516 reports. That amounted to an average of 40.31 million won per report. A government official said, "Considering that someone could face retaliation for reporting, the reward may be seen as insufficient."
One analysis is that this happens because reporting rewards are paid out of each ministry's budget. Even if a case arises that requires paying a reporting reward, it is difficult to pay if the budget is lacking. In fact, the Korea Fair Trade Commission cut other project expenses, such as research services, when it fell short of the rewards it had to pay reporters from 2021 to 2023. Also, even if there is money left in a year's reporting reward budget, it is hard to carry it over to the following year.
Amid these circumstances, President Lee Jae-myung issued multiple directives to significantly expand the payment of reporting rewards. In response, the Ministry of Planning and Budget is said to be reviewing a plan to establish a separate fund to expand resources for reporting rewards.
A fund can be managed more flexibly than a budget. If a fund is created as a common resource for reporting rewards paid by all ministries, it becomes relatively easier to secure resources when the current reward caps are raised or when new reporting rewards are introduced. At present, when a ministry exhausts its reporting reward budget, it cannot use another ministry's rewards, but with a fund, that approach would also become possible. Changing expenditure items is easier than under a budget.
Before setting up a separate fund to secure resources for reporting rewards, the Ministry of Planning and Budget plans to first grasp the current situation. It said the types of reporting rewards scattered across ministries and the budget size for each reward have not been compiled.
Newly creating a 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 then reflect a fund related to reporting rewards in next year's budget bill.