South Korea’s financial ministry said Monday it plans to tighten rules on overseas financial accounts held by its nationals in a bid to crack down on tax evasions and root out illegal deeds.

South Koreans with overseas financial accounts worth more than 1 billion won ($899,000) will be obligated to report their overseas assets and their sources starting next year, according to the Ministry of Strategy and Finance.

The plan is in line with the government’s move to establish a fair tax justice system and raise tax revenue for its costly welfare programs by regularizing the underground economy that provides a platform for illegal business activities such as tax evasion and smuggling.

Following the new rule, South Koreans with such financial accounts will be imposed with a 10 percent fine on their assets when they fail to report them to the national tax agency.

Tax evaders will be also levied with additional penalties, which could make them pay up to 18 percent of the unreported assets as fines.

The current rule only imposes a 4 percent fine for unreported overseas accounts with assets worth less than 2 billion won. (Yonhap News)