Tax agency targets 41 businesses over price practices

Korea's tax agency said Monday it has launched probes into 41 businesses for allegedly engaging in unfair practices and contributing to consumer price instability, as the government seeks to curb inflation ahead of the Chuseok harvest holiday.

The National Tax Service (NTS) said the move came after it detected cases in which businesses inflated productioSn costs and ultimately passed the burden on to consumers.

The investigation covers 23 agricultural product retailers, including 11 egg producers suspected of underreporting tens of billions of won in profits.

The NTS said it has also launched probes into 12 grain, fruit and meat retailers, including businesses that received tariff quota benefits but allegedly inflated expenses and underreported sales.

The agency added that it detected suspected cost manipulation and irregular accounting practices at 16 food franchises as well.

The NTS said Korea's largest food delivery platform, Baedal Minjok, or Baemin, also avoided around 100 billion won ($74.3 million) in taxes through complex capital transactions with its German parent company involving around 1 trillion won in profits generated in Korea.

Baemin additionally allegedly passed marketing and promotional costs on to restaurants and supermarkets in the form of commissions and advertising fees, according to the agency.

"The NTS will continue to monitor tax evasion schemes in areas closely related to people's livelihoods in line with the government's efforts to stabilize consumer prices," the agency said.

Yonhap