South Korea’s Gyeonggi Province, the most populous in the country, has announced that it has collected $4.6 million from people who failed to pay taxes on their crypto earnings, according to a report by Yonhap News Agency on Thursday.
The province was able to trace and collect the crypto accounts of the tax dodgers by using a new digital tracking system, which is the first of its kind in South Korea.
The system uses the local registration number of the violators, which is held by the local authorities, to find their mobile numbers. Then, it uses the mobile numbers to track the accounts linked to crypto exchanges. This way, the system can identify the amount of taxes owed by each violator.
The system has significantly improved the efficiency of the tax collection process, as it only takes 15 days to get the information from the crypto exchanges, compared to the previous six months.
Crypto Tax Compliance Challenges
The system has found 5,910 violators who owed more than $2262 each in taxes. However, only 2,390 of them have paid their dues so far, amounting to $4.6 million.
Noh Seung-ho, the head of the Provincial Tax Justice Department, said that the province will continue to take strong action against the violators. “We will continue to take strong collection action against unscrupulous delinquents who say they do not have money to pay taxes and trade virtual assets,” he said, according to Yonhap News Agency.
South Korea has been struggling to implement its tax policies on crypto earnings, as it has faced delays and opposition from the crypto industry. It has also been investigating some crypto firms for tax evasion.
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