South Korea tax arrears exceed 116 trillion won

South Korea's cumulative national tax arrears have surpassed 116 trillion won as of June, according to data from the National Tax Service provided to lawmaker Kang Min-kuk. The total number of tax delinquency cases reached approximately 5.64 million.

Value-added tax (VAT) represents the largest portion of unpaid taxes at 33.4 trillion won, followed by income tax at 27.4 trillion won and capital gains tax at 13.3 trillion won. Experts note that VAT arrears often stem from business liquidity issues, as businesses collect tax from consumers but struggle to remit it to the state.

Late payment penalties have also seen a significant rise. Cumulative penalties for payments made before the statutory deadline reached 21.6 trillion won between 2021 and July of this year. Meanwhile, penalties for payments made after the tax office issues a notice have increased nearly 3.8 times over the last four years, rising from 702.1 billion won in 2021 to 2.6 trillion won in 2025.

Lawmaker Kang Min-kuk suggested that the surge in arrears and penalties reflects prolonged domestic economic stagnation. He urged the National Tax Service to shift its focus from merely imposing penalties to managing the growth rate of arrears and developing more effective management strategies.