Tax Evasion Estimated at KRW 55 Trillion Per Year in South Korea
September 20, 2016 Taxation in South Korea
SEOUL – The size of Korea’s underground economy outweighs that similarly sized countries, leading to significant levels of tax evasion.
The results of new research released on September 19th Professor Kim Jong-hee of Chonbuk National University of Korea has shown that the size of the underground economy in South Korea exceeds that of other OECD countries.
It was estimated that on average between 1995 and 2014 the underground economy in South Korea made up 10.89 percent of the national GDP.
In comparison the average size of the underground economy in the other OECD countries was 8.06 percent, while among G7 countries the level was only 6.65 percent.
The prominent underground economy has also resulted in comparatively high levels of tax evasion, with the ratio of tax evasion-to-GDP in South Korea being estimated to stand at 3.72 percent, while in G7 countries and the OECD countries the levels were 2.21 percent and 3.06 percent respectively.
The tax evasion levels equate to a tax loss of approximately KRW 55 trillion per year.
Photo By: Karl Baron