SEOUL, Sept. 20 (Korea Bizwire) — The current practice of offering financial rewards to those who report when a business fails or refuses to issue a cash receipt is encouraging many to become ‘bounty hunters’ to earn extra cash.
Last year, the number of individuals who were financially rewarded for reporting businesses that failed to issue cash receipts soared.
The number of people who received the maximum financial reward of 2 million won (US$ 1,700) increased by 28 percent.
Rep. Choo Kyung-ho of the main opposition Liberty Korea Party revealed that 105 people received the maximum financial reward last year for reporting malpractices related to cash receipts, up by 28 percent since the previous year.
The total number of recipients of financial rewards also rose from 4,415 people in 2017 to 5,407 in 2018.
Income tax regulations stipulate that businesses that sell goods or services that cost more than 100,000 won, including value-added tax (VAT), are required to issue cash receipts to customers.
Businesses that fail to issue cash receipts can be reported in exchange for a financial reward of 20 percent of the undeclared amount.
Small businesses with less than 48 million won in annual sales accounted for 24.5 percent of all reported malpractices related to cash receipts last year.
Among the reported cases, 60.8 percent involved unintentional non-issuance of cash receipts.
“The current regulations that define the act of deliberate rejection and unintentional non-issuance of cash receipts as amounting to an equivalent form of malpractice imposes more pressure on small businesses,” said Choo.
H. M. Kang (email@example.com)