Of this year's supplementary budget of 26.2 trillion won, 213.3 billion won will be invested in projects to recover delinquent taxes, fines, and penalty surcharges. To that end, the National Tax Service will expand the National Tax Delinquency Management Unit and establish a Non-Tax Revenue Delinquency Management Unit.
A similar program is the local government tax delinquency management unit that President Lee Jae-myung introduced in 2019 when he was Gyeonggi governor. Reports say the amount of delinquent taxes Gyeonggi Province recovered over the three years showed little difference before and after the unit was launched.
◇ Delinquent "national tax + non-tax revenue" surpassed 139 trillion won last year
Delinquent national taxes have increased every year. According to the National Tax Portal Statistics, the cumulative delinquent amount was 99.8607 trillion won in 2021. It then rose to 102.514 trillion won in 2022, 106.0597 trillion won in 2023, and 110.731 trillion won in 2024. Last year it climbed to 114.0969 trillion won, setting a record high every year. That is why the National Tax Service created the National Tax Delinquency Management Unit this year.
The Non-Tax Revenue Delinquency Management Unit began with a point raised by President Lee Jae-myung. At a Cabinet meeting on Jan. 27, the president said, "Non-tax revenue in arrears is even less well managed than national tax." He went on, implying that the National Tax Service should also collect non-tax revenue: "Either hire (personnel) in the name of each ministry and dispatch them, or manage it jointly." Last year, delinquent non-tax revenue totaled 25.1 trillion won.
◇ "The National Tax Service, with more data, could recover more arrears than local governments"
A delinquency management unit was previously introduced in Gyeonggi Province. It was when President Lee Jae-myung was governor. In 2019, the first year the local government tax delinquency management unit was launched, Gyeonggi Province recovered 418.8 billion won in arrears. That was similar to 2017 (430.1 billion won) and 2018 (403 billion won), when there was no management unit.
After that, recovered delinquent local government taxes were 401.4 billion won in 2020 and 410.9 billion won in 2021, showing little change. It is said that 83 billion won was spent to operate the local government tax delinquency management unit. The performance relative to expense can be seen as low. The National Assembly Budget Office also said of the National Tax Service's National Tax Delinquency Management Unit that "there is a need to scrutinize the project plan."
However, some experts say recoveries could increase if the National Tax Service, rather than local governments, runs the delinquency management unit. They note that the National Tax Service can examine a delinquent payer's income and card payment history, which municipalities cannot access.
Lee Sang-min, senior research fellow at the Fiscal Reform Institute, said, "The collection capability of ordinary local governments and the National Tax Service (which handles only tax affairs) will differ," adding, "With so much information, the National Tax Service can do a lot as long as it has enough hands and feet like a delinquency management unit."