A local report revealed that the provincial tax department has implemented a new digital tracking system in one of South Korea’s most important provinces. As the first of its kind in the country, the new system reduces process time and helps track crypto assets held by debtors on virtual asset exchanges.

$4.6 million seized with new digital tracking system

On Feb. 22, Yonhap News Agency reported that the Gyeonggi Province Taxation and Justice Office has implemented a new system. The digital tracking system enables provincial tax authorities to “easier” track cryptocurrency trading accounts held by tax evaders.

Gyeonggi-do is the most populous province in South Korea, with a population of over 13 million. The Gyeonggi-do region has historically held an important political position in the country and is part of the Gyeonggi region, also known as the Seoul Capital Region, which consists of the metropolitan areas of Seoul, Incheon, and Gyeonggi-do.

According to local reports, provincial tax authorities previously used local household registration information to collect information on debtors’ assets, including asset transfers and sales. In addition, tax authorities also used phone numbers held by local governments to detect whether “lawbreakers” were registered on virtual asset exchanges.

The Gyeonggi Provincial Taxation Department then confirmed its findings case by case with the relevant cryptocurrency exchanges. Although successful, the verification process would become lengthy, causing problems for the provincial tax office.

As a result, the province developed a new electronic management system that significantly reduced the six-month verification process to 15 days. Through this method, the provincial tax department’s success rate in detecting and seizing crypto assets has greatly increased.

Thanks to the newly implemented system, the Gyeonggi Province Tax Office confirmed that 5,910 people with more than 3 million won (about $2,200) had virtual asset accounts on exchanges, holding cryptocurrencies such as Bitcoin.

The Gyeonggi Province tax department confirmed that it could collect 6.2 billion won ($4.6 million) in taxpayer debts by confiscating cryptocurrencies from 2,390 people who purchased cryptocurrencies last year.

South Korea seeks compliance for cryptocurrency exchanges South Korea seeks compliance for cryptocurrency exchanges

Noh Seung-ho, director of the Provincial Department of Taxation and Justice, expressed the agency's intention to protect honest taxpayers and to impose fair taxes on those who claim they cannot pay their taxes: The Provincial Department of Taxation and Justice said the agency aims to protect honest taxpayers and to impose fair taxes on those who claim they cannot pay their taxes:

We will continue to take strong collection actions against those unscrupulous offenders who claim they do not have the money to pay taxes and trade virtual assets.

According to local reports, the province plans to strengthen its cooperation system with cryptocurrency exchanges. In addition, it plans to review administrative measures related to the refusal to comply with the "right to conduct inquiries and inspections on exchanges that are not sufficiently proactive in submitting data." Cooperation system with cryptocurrency exchanges. In addition, it plans to review administrative measures related to the refusal to comply with the "right to conduct inquiries and inspections on exchanges that are not sufficiently proactive in submitting data."

Similarly, South Korea’s Financial Intelligence Unit (FIU) recently outlined its work plan for cryptocurrency exchanges by 2024.

The plan aims to strengthen the country's reporting and inspection of virtual asset exchanges by improving anti-money laundering (AML) measures. Non-compliant cryptocurrency exchanges will face a ban and cease operations in the country. Inspection of virtual asset exchanges by improving anti-money laundering (AML) measures. Non-compliant cryptocurrency exchanges will face a ban and cease operations in the country. #韩国 #数字追踪纳税