National Tax Service Commissioner Kim Duk-joong said Monday that the tax agency will expand its investigations into companies or the wealthy suspected of holding offshore accounts and purposefully not making disclosures for tax payments.

Also, the tax agency will target those who have avoided regular filings of their gift and inheritance taxes after transferring their assets or operational ownerships to next of kin or business subsidiaries.

The NTS will maximize the use of the financial regulators’ intelligence system to justify taxation on the underground economy, of which the proportion to the gross domestic product is extremely high, at around 30 percent. In other advanced countries such as the U.S., Europe and Japan, the underground markets account for less than 10 percent of their GDP.

Its strong will to bring offshore tax evaders and other dodgers to light comes as the incumbent government seeks to increase tax revenue in an effort to finance welfare projects and the sustainability of small and medium enterprises.

The commissioner assured corporate executives associated with the Korea Federation of Small and Medium Business that the NTS will not burden or hinder business operations under its toughened tax measures.

It is rare for a top tax official to have a firsthand meeting with entrepreneurs to explain the organization’s policy goals. He is also scheduled to give a briefing on tax policies during his visit to the Korea Chamber of Commerce and Industry on Thursday.

Kim also said during his presentation of its tax administrative policy on the shadow economy that it will not misuse the financial intelligence system against SMEs or the self-employed.

The tax agency’s investigations will focus mainly on “sizeable” cases, over which the public share a common view with the government for stringent measures.

It will instead ease tax audits on SMEs and regional small businesses, as well as on businesses that previously closed down so that they can have a second chance at launching a new company.

The NTS has recently relaxed its tax regulations against companies that had been operating in the inter-Korean industrial complex in Gaeseong where they were prohibited from further running their factories by North Korea amid heightened tensions between the two Koreas.

The expanded use of the financial intelligence system by the NTS will improve tax fairness as it will shrink the size of Korea’s underground economy and prevent tax evasion via offshore tax havens, according to the Korea Institute of Public Finance.

The government seeks to raise an additional 15 trillion won in tax revenue from tax expenditures over the next five years of President Park Geun-hye’s term.

By Park Hyong-ki (hkp@heraldcorp.com)