The National Tax Service is poised to revolutionize tax administration with the introduction of artificial intelligence, aiming to automate tax filing processes and provide personalized tax consulting services. This significant shift is slated to begin next year, according to recent announcements.
AI-Powered Tax Services on the Horizon
Following the government’s first anniversary, the National Tax Service unveiled its key achievements and future operational strategies. A central focus for the coming year is the comprehensive adoption of AI in tax administration. This initiative includes the development of an AI-driven tax filing service, with the core business operations expected to commence in the year after next.
The service will leverage decades of accumulated tax expertise, feeding this knowledge into AI systems. By inputting basic corporate information, such as financial statements, the system will be capable of automatically identifying potential tax evasion risks. This development aims to create a robust tax evasion detection system.
Consolidating Non-Tax Revenue Management
Furthermore, the National Tax Service is pushing to consolidate the collection and management of non-tax revenues, with the ambition of transforming the agency into a comprehensive revenue collection body. Currently, various ministries and local governments are responsible for collecting a wide array of non-tax revenues, encompassing items like surcharges, penalties, and development contributions, across 95 categories.
These non-tax revenues have seen substantial growth, rising from 193.2 trillion won in 2020 to 257.8 trillion won in 2024, representing approximately 43% of the government’s total revenue. Concurrently, the outstanding balance of uncollected non-tax revenue has also increased, from 19.1 trillion won to 25.1 trillion won during the same period.
The decentralized nature of non-tax revenue collection and management, spread across different government entities, presents a challenge. To centralize authority, legislative changes are required to empower the National Tax Service. Although a bill to address the collection and management of uncollected non-tax revenues was introduced in February, it has not yet passed.
In response to a directive from the President in January, which urged the development of a management plan even before legislative reform, the National Tax Service established a dedicated team for managing uncollected non-tax revenues. This team officially began its in-depth investigations into delinquent taxpayers in July.
Significant Revenue Recovery Achieved
Over the past year, from May of the previous year to April of the current year, the National Tax Service successfully recovered 3.1 trillion won in uncollected taxes. Additionally, 33.9 billion won was repatriated from delinquent taxpayers who had moved assets abroad to evade taxes.
The agency also reported that tax investigations have led to the recovery of taxes related to irregular capital market activities, price gouging, and real estate speculation. Specifically, in July of the previous year, tax investigations into 27 cases of unfair stock market practices resulted in the recovery of 257.6 billion won. Furthermore, investigations into price gouging uncovered 308.4 billion won across 40 cases.
