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Busan Metropolitan City Audit Committee Announces Findings of the “Special Audit on Traffic Inducement Charges”… Calls for Improvements to Collection and Management Systems

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The Busan Metropolitan City Audit Committee (Chairperson Yun Hee-yeon) announced today (14th) the results of the “Special Audit on Traffic Inducement Charges.”

This special audit was conducted in response to growing public interest in transparent collection and management of public finances, with the aim of strengthening transparency and fairness in the Traffic Inducement Charge system and improving fiscal soundness.

The special audit was carried out from June 9 to 27, targeting 16 district and county offices responsible for imposing and collecting the charges, as well as the city department overseeing them, and examined the overall administrative process related to Traffic Inducement Charges.

This audit was undertaken with a particular focus on contributing to securing tax revenues and fiscal sustainability, and on developing systematic measures for the collection and management of Traffic Inducement Charges.

The audit reviewed the appropriateness of assessment criteria for charges imposed on facilities located on adjoining lots owned by the same individual, as well as the validity of exemptions from charges.

Additionally, to ensure fairness among facility owners and verify the effectiveness of reductions, the audit compared and analyzed the status of traffic volume reduction activities—an incentive-based reduction program—across districts and counties.

As a result of the audit, several inappropriate cases of non-application of adjoining-lot rules and misapplication of exemptions were identified, along with inconsistencies in how districts and counties assessed the implementation and reduction criteria for traffic volume reduction activities due to ambiguous guidance.

For instance, although facilities located on adjoining lots owned by the same individual should be regarded as a single facility and assessed based on the combined total floor area of all building levels, 133 such facilities (owned by 62 individuals) were found to have been assessed separately. This resulted in 217 under-assessments totaling KRW 623,692,000.

Additionally, due to errors in applying exemption criteria, cultural facilities installed by local governments—eligible for exemptions—were incorrectly charged, resulting in excessive collection of KRW 21,956,000. Conversely, underground shopping malls, which are subject to the charges, were mistakenly classified as metro-related facilities and exempted, causing an under-assessment of KRW 72,027,000.

Furthermore, because the types of traffic volume reduction activities and their implementation and reduction criteria, as specified in the city ordinance and administrative manual, were ambiguous, each district and county interpreted and applied the standards differently. The audit concluded that improvements to the system are needed.

Accordingly, the Audit Committee issued the following to the relevant departments: ▲32 administrative measures (corrections, cautions, improvements, notifications, etc.) ▲financial measures totaling KRW 717,675,000 ▲a request to revise the administrative manual to establish clear implementation and reduction criteria for traffic volume reduction activities and to improve the system overall.

The Committee called for recovery of KRW 695,719,000 in under-assessed charges caused by the failure to apply the adjoining-lot rule, and for refunding KRW 21,956,000 that had been improperly over-collected from entities eligible for exemptions—thereby strengthening fiscal integrity.

Additionally, by requesting institutional improvements, including revisions to the administrative manual to establish objective and reasonable implementation and reduction criteria for traffic volume reduction activities, the Committee aims to enhance fairness among facility owners and ensure consistency and effectiveness in reduction activities.

Detailed audit results are available on the city’s website under Audit Results at:www.busan.go.kr/gbinspec02

Chairperson Yun Hee-yeon stated, “This audit focused not on detection but on improving the system, and we will continue to monitor the process of implementing improvements. We expect that this audit will serve as a foundation for ensuring systematic management of Traffic Inducement Charges imposed on citizens and transparent management of public finances.”