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A South Korean province has recently taken significant actions against local tax evasion by seizing cryptocurrency assets valued at approximately $890,000 from the crypto wallets of residents who have failed to meet their tax obligations. The North Gyeongsang Province has set an ambitious goal of collecting local tax arrears totaling around $136 million by the end of the year, as reported by Daekyung Ilbo.
Intensified Tax Collection Efforts
As part of its aggressive tax recovery plan, North Gyeongsang Province reported that it had successfully collected over $35 million of the outstanding tax arrears by the end of August this year. With tax evasion in the spotlight, residents holding cryptocurrencies would do well to prepare for increased scrutiny from local authorities.
The province, along with 22 of its largest cities and counties, is set to embark on two months of concentrated efforts aimed at settling these tax debts. The campaign will officially commence on October 14 and continue through December 13, as the province seeks to meet its financial targets.
Formation of Collection Teams
To enhance its collection capabilities, North Gyeongsang Province has established a network of “Local Tax Arrears Collection Teams.” These teams, led by local government officials and supported by tax professionals, are tasked with executing systematic and comprehensive strategies for tax collection.
The province has made it clear that it will promptly initiate the sale process for any seized assets. In cases involving cryptocurrency holders, this will likely mean liquidating the confiscated coins through cryptocurrency exchanges.
Legal Support for Tax Recovery
South Korean law empowers local tax authorities to compel domestic cryptocurrency exchanges to provide information about their clients. By cross-referencing crypto wallet data with their records of unpaid tax bills, local governments can identify tax evaders more effectively.
In previous enforcement actions, tax authorities have issued ultimatums to delinquent taxpayers, warning that failing to settle their debts in fiat currency will result in the liquidation of their cryptocurrency assets, with the proceeds being confiscated.
Broader National Crackdown
Similar tax collection efforts are being observed across various provinces and metropolitan areas in South Korea, with some authorities already liquidating millions of dollars’ worth of Bitcoin, Ethereum, and other significant altcoins in their efforts to recover unpaid taxes.
Kim Ho-jin, head of the North Gyeongsang Provincial Planning and Coordination Office, emphasized the need for these strict measures to ensure fairness for compliant taxpayers. He urged those with unpaid taxes to act quickly to settle their debts to avoid asset seizures, stating that timely payments would help prevent the impending sale of their cryptocurrency holdings.
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