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South Korean Province Collects $4.6M in Back Taxes Using Crypto Tracking System

crypto tax

South Korea

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Jai Pratap

Author

Jai Pratap

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Jai serves as the Asia Desk Editor for Cryptonews.com, where he leads a diverse team of international reporters. Jai has over five years of experience covering the web3 industry.

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Last updated:

February 22, 2024

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Source: Midjourney

South Korean province of Gyeonggi is utilizing a nuanced tracking system to claw back taxes by tracking individual’s crypto holdings. The povince has already recovered a total of $4.6 million in owed taxes from just one group of delinquents who held crypto.

Previously, the process of identifying and seizing crypto assets from tax evaders was slow and cumbersome, taking up to six months per case. However, a newly developed electronic management system has slashed that timeframe to a mere 15 days, local media outlet reported.

Here’s how it works: authorities first input a list of delinquent taxpayers into the system. The system then leverages resident registration numbers to track mobile phone numbers, significantly boosting the success rate of finding these individuals registered on cryptocurrency exchanges.

Authorities Track Down Over 5,000 Tax Evaders Holding Crypto

This enhanced tracking system has led to the discovery of 5,910 tax evaders holding virtual assets like Bitcoin, owing a combined $3.5 million. Through the streamlined system, officials were able to collect a whopping $4.6 million in back taxes from over 2,300 of those individuals in just one year.

“We will continue to aggressively pursue dishonest delinquents who claim they have no money to pay taxes while dealing in virtual assets,” declared Noh Seung-ho, head of the Provincial Tax Justice Department. He emphasized their commitment to protecting honest taxpayers and ensuring fair taxation through such innovative measures.

The province is further bolstering its efforts by strengthening cooperation with crypto exchanges and exploring administrative actions against those that resist data inquiries, a power granted to local governments.

As reported earlier, South Korea’s ruling People Power Party is advocating for a two-year postponement of the taxation on gains from cryptocurrency investments. The move is seen as a potential campaign promise for the upcoming general election scheduled for April.