Tax authorities launch probe into wholesalers amid rising agricultural prices

Apr 24, 2024, 09:49 am

		0
Apples at a traditional market in Seoul/ Photographed by Song Eui-joo

AsiaToday reporter Lee Kyung-wook

The tax authorities have reportedly launched a tax investigation into wholesale market corporations related to large and mid-sized corporates taking part in the distribution process of major agricultural products, such as apples.

According to the relevant authorities on Tuesday, they are conducting intensive tax investigations on wholesale market companies affiliated with companies involved in the distribution process, believing that the main cause of the recent surge in agricultural prices is due to the excessive profit-taking of these companies in the distribution process.

Domestic agricultural products are mainly distributed through the “producers - wholesale market companies -intermediate wholesalers – retailers - consumers” channel, and these wholesale market companies are at the center of this distribution structure. These companies are known to be making huge profits by taking advantage of the recent surge in prices while controlling the price of agricultural products.

It has been found that several fruit and vegetable corporations are related to conglomerates. The National Tax Service believes that these companies usually take about 4 percent of the auction winning price (transaction amount) from agricultural shippers as consignment fees, and they are making high operating profits by charging uploading fees.

The tax authorities plan to thoroughly examine whether accounting has been properly handled in the process and whether there is an anomalous accounting process in profits flowing into related affiliates.

If those companies are found to have failed to properly report tax evasion, the tax authorities plan to switch to a special tax investigation and collect related taxes. If the amount of tax evasion is large and that there was a malicious intention in accounting process, the government plans to launch an investigation into tax crimes and file a prosecution complaint based on the results.

The government is inspecting 36 places, including wholesale markets, production distribution centers, consignment markets, hypermarkets, online malls, and private storage companies, through the “Farm and Fisheries Distribution Structure Improvement Task Force,” but critics point out that efficient price management is not possible due to excessive and complex distribution processes. As a result, there are concerns that it is fundamentally difficult to meet the government’s price targets.

#tax #whole #agricultural prices #investigation