Gwangju District Court (Image courtesy of Yonhap)
GWANGJU, Nov. 20 (Korea Bizwire) – A South Korean court has levied a fine of 18 billion won for unpaid taxes, giving the individual charged the option of working off the fine with a daily labor value set at 16.5 million won.
Despite mounting criticism of the so-called ‘emperor’s labor,’ the court maintains it has no other recourse.
On Sunday, the Gwangju District Court’s Criminal Division 12 announced a three-year prison sentence with a stay of execution for five years for an individual named Ahn (40), accused of not paying a substantial amount of taxes while operating illegal gaming sites.
The court also imposed a fine of around 18 billion won. Considering Ahn received separate punishment for the illegal gaming site operation and expressed remorse, the court opted for probation. However, a fine was imposed to recover the total amount of tax he unlawfully evaded.
Ahn operated an illegal gambling site by establishing offices in foreign countries, including Thailand, from 2017 to 2019. His gambling site accrued a fund of about 182.1 billion won. Over three years, he neglected to pay approximately 18 billion won in taxes, encompassing value-added taxes and income taxes, without reporting his income to tax authorities.
The court emphasized that the crime of tax evasion disrupts the tax order, resulting in a decrease in tax income and transferring the burden to ordinary citizens. Consequently, the court deemed it necessary to impose an additional punishment, levying an 18 billion won fine.
However, a contentious aspect of the court’s ruling is that if Ahn fails to pay the 18 billion won fine, he will have the option to work off the fine, with the daily labor value set at 16.5 million won, sparking the ‘emperor’s labor’ controversy.
The term ‘emperor’s labor’ originated when Huh Jae-ho, the former chairman of the now-defunct Daeju Group, was allowed to offset a fine with penal labor valued at 500 million won per day.
Under the current law, it is inevitable to establish the daily penal labor rate for ‘emperor’s labor’ for individuals imposed with a high fine. This is primarily attributed to Article 69 of the Criminal Act, which specifies that the duration of confinement in a labor facility for those who fail to pay fines should not exceed three years.
J. S. Shin (js_shin@koreabizwire.com)
