Feb 9 β€’ 03:20 UTC πŸ‡°πŸ‡· Korea Hankyoreh (KR)

Why did alcohol and ice cream prices rise? Companies that spent on rebates and excessive logistics fees face tax claims

The National Tax Service of South Korea has imposed tax claims on 53 monopoly liquor companies, amounting to β‚©178.5 billion, for profit evasion linked to rebates and inflated logistics costs.

The National Tax Service of South Korea has revealed that it has extracted β‚©178.5 billion in unpaid taxes from 53 companies, primarily in the alcohol and processed food sectors, related to price increases resulting from illegal rebates and excessive logistical expenses. This investigation, initiated in September of the previous year, uncovered around β‚©3.898 trillion in evaded income among these companies, with about β‚©150 billion attributed to three major food monopolies alone. One of the liquor companies, which has increased its market share through illicit rebate payments disguised as advertising expenses, has reportedly paid approximately β‚©1.1 trillion in rebates to retailers while improperly categorizing this as advertising cost. The National Tax Service has concluded that the improper rebate payments significantly contributed to the overall increase in alcohol prices, rising by 22.7%. Similarly, an ice cream manufacturer has been found to have overpaid logistics fees to related parties by around β‚©25 billion, which has also led to increased prices for children's snacks by about 25%. In light of these findings, the National Tax Service has commenced a new investigation targeting 14 companies causing inflation in the prices of basic foodstuffs and daily necessities, particularly in anticipation of the upcoming Lunar New Year celebrations. This new wave of investigations includes six processed food manufacturers suspected of price collusion, as well as distribution companies and franchisors, with total evaded amounts reaching approximately β‚©500 billion. Notably, one of the flour processing companies recently prosecuted for collusion is among those under investigation, as is a produce distribution company that has reportedly raised prices despite receiving subsidies from a preferential tariff scheme.

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