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National Tax Service (NTS) of Korea. (Photo = NTS) |
[Alpha Biz= Kim Jisun] Seoul, September 25 – The National Tax Service (NTS) announced it has uncovered KRW 800 billion in tax evasion among 55 businesses in food-related industries, including processed food manufacturers, agricultural and fisheries distributors, and franchise headquarters in the restaurant and coffee sectors.
The crackdown comes just ahead of the Chuseok holiday, as authorities intensify efforts to curb excessive food price hikes. Investigations revealed that some companies inflated raw material costs, underreported income, or diverted corporate funds for personal use, all while passing on higher prices to consumers.
One coffee franchise headquarters (Company A) was found to have raised beverage prices by more than 10% citing raw material costs, while secretly purchasing overpriced supplies from a family-owned affiliate (Company B). It also manipulated advertising expenses to appear as though the headquarters covered the full amount, while actually splitting costs with franchisees, and collected unreported commissions from designated interior contractors.
Other examples include:
Processed food companies: 8 out of 12 raised prices by more than 10%, while one company disguised executives’ family members as contract workers to funnel salaries and used company funds for private land development.
Agricultural distributors: Exploited the lack of documentation requirements in direct farm transactions to inflate prices, omitted cash sales, and diverted corporate funds for luxury purchases such as apartments, sports cars, and yachts.
Franchises: 10 out of 14 raised menu prices by over 10%, including large chains with more than 1,000 outlets. Coffee and restaurant franchises were heavily represented.
Wedding and funeral service providers: Increased prices by 15–20% on average and induced cash payments to conceal sales.
Democratic Won, Director of Investigations at the NTS, emphasized: “We will mobilize every available tool, from temporary seizure to financial tracking, to conduct thorough investigations into these unlawful practices.”
The NTS noted that this latest round of audits reflects its broader efforts to monitor “essential living cost” industries and deter unfair practices that burden consumers.
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
