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(EDITORIAL from Korea Herald on April 6)

All Headlines 07:10 April 06, 2016

Panama papers leak
NTS should crack down on offshore tax evaders

The eldest son of disgraced former President Roh Tae-woo has been found to have established three paper companies in an offshore tax haven in 2012, raising suspicions that he might have attempted to hide some of his father's slush funds.

The finding was reported by Newstapa, an independent online news outlet that analyzed, in cooperation with the International Consortium of Investigative Journalists, the leaked documents of Mossack Fonseca, a Panama law firm known for helping clients hide their wealth.

The confidential documents, amounting to 2.6 terabytes, were first obtained by a German daily newspaper. The ICIJ distributed the papers to 107 media organizations in over 80 countries for analysis and investigation.

The documents reportedly contain a large amount of covert transactions made over the past four decades. Initial reports have exposed clandestine deals involving high-ranking political figures and global celebrities.

Newstapa said it has identified some 15,000 files containing the search keyword "Korea." From them, it has found the names of 195 presumed South Koreans who entered their addresses in Korea. It plans to report on them one by one after confirming their identities.

Ex-president Roh's son, Jae-heon, set up the three shell companies in British Virgin Islands in May 2012. Newstapa suspected that the junior Roh might have sought to squirrel away some of the wealth his father had illegally gained during his presidency from 1988 to 1993.

The former president was convicted of treason, mutiny and corruption in 1996. The court slapped him with a staggering fine of 263 billion won ($227.5 million) for corruption in office. He managed to repay the fine, but was suspected of having transferred some of his slush funds to his son.

Now, the National Tax Service must find out why the junior Roh established the three paper companies in the tax haven. If he is found to have used the firms to hide illicit wealth, he should be punished accordingly.

The tax office also needs to secure the list of 195 presumed Koreans identified by Newstapa and launch a tax probe on them.

In 2013, the NTS conducted a tax probe into the 182 Koreans who were found by Newstapa to have set up fake companies in offshore tax havens. The tax office confirmed that 48 of them had evaded taxes through the bogus companies. It collected a total of 132.4 billion won in penalties from them.

Recently, the tax office declared war on offshore tax evasion. The latest leak of confidential documents from Panama should give a timely boost to its crackdown on tax evaders.
(END)

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