National Tax Service

Jeon
Goonpyo, Commissioner of the National Tax Service is known among colleagues
and staff as a man of guts and determination. A case in point: Last year\'s
filing results for the Comprehensive Real Estate Holding Tax. With a fivefold
increase in the number of taxpayers - and very unhappy ones at that - subject
to the tax and a 6.2-fold growth in the average tax burden for home owners,
all odds seemed against the NTS.

At
the time, few, if any, believed the NTS would be able to pull this one off.
Instead of allowing worries get the best of him, Jeon decided to make the best
of the situation. He began by making the gutsy decision of cutting investigative
resources by 15% (672 people) and redirecting them to real-estate tax functions.
He then instructed the chiefs of regional and district tax offices to make personal
visits to religious leaders, as they are the ones that have the strongest influence
on public opinion. The efforts paid off. Despite predictions to the contrary,
that year\'s filing rate reached 98.1%, up 2.1 percentage points from the previous
year.

With
the collection of the Comprehensive Real Estate Holding Tax behind, Jeon had
moved on to a new challenge : cracking down on corporate slush funds ahead of
the presidential race planned for later this year. The overriding consensus
among NTS insiders is that this native of a small mining town of Samcheok in
Kangwon Province will once again take matters in hand - his way.

There
is no shortage of examples when it comes to doing things "the Jeon way."
Korea
had been experiencing deficits in tax revenues for two consecutive years of
2004 and 2005. However, notwithstanding an economy that was struggling, the
tax agency raked in 2.4 more trillion KRW in taxes than was planned for 2006.
The surplus was not a result of wielding tax audits as a means of "wringing"
tax dollars out of taxpayers\' pockets. If anything, the number of tax audits
was down last year. Last year, 3000 (or 12%) less audits were conducted and
their duration was reduced by 20%. What did go up was the intensity of the investigation
once an on-going audit revealed suspicious activities. Jeon had worked the psychology
of the taxpayers so that they would pay up, up-front. As he had always said,
"tax audits exist to eliminate the need for tax audits."

This
is an English translation of the Korean article that appeared on the January
31, 2007 edition of the JoongAng Daily. Original article written by Reporter
Kim Chang-Kyu.