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Busan Metropolitan City Audit Committee Announces Results of Special Audit on Local Tax Delinquencies, Calls for Establishment of Management Standards

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The Busan Metropolitan City Audit Committee (Chairperson Yoon Hee-yeon) today (June 12) announced the results of the “Special Audit on Local Tax Delinquencies,” which was conducted from December 4 to 24, 2025.

The audit was carried out in response to the continuing decline in the City’s fiscal self-reliance ratio since 2022 and the growing need to secure stable local tax and non-tax revenue sources. It targeted municipal departments (agencies) and the 16 district and county governments responsible for private capital subsidy projects implemented on or after January 1, 2022.

The audit focused particularly on whether local tax and non-tax revenue delinquencies were properly verified during the selection of local subsidy recipients and on the overall operation of related administrative systems.

The audit found numerous cases in which local tax and non-tax revenue delinquency status was not adequately reviewed during the selection process for local subsidy recipients.

According to the Standards for Local Subsidy Management, heads of local governments are required to review applicants’ local tax and non-tax revenue delinquency status when selecting local subsidy recipients and determining subsidy amounts.

However, among a total of 546 subsidy projects carried out by 16 municipal departments and the 16 district and county governments, only 95 projects (17.4%) verified local tax delinquency status through the submission of certificates of tax payment completion or similar documentation. The remaining 451 projects (82.6%) did not verify either local tax or non-tax revenue delinquency status.

As a result, approximately KRW 12.12 billion in subsidy funds was paid to local subsidy recipients and related entities that had accumulated a total of 1,009 cases of delinquency in local taxes and non-tax revenues, amounting to approximately KRW 428 million.

Notably, among all delinquency cases, 461 involved administrative fines and 133 involved resident tax, indicating that many were related to basic payment obligations expected of citizens.

Detailed audit results can be found on the Busan Metropolitan City website under the Audit Results section at https://www.busan.go.kr/gbinspec02.

The Audit Committee recommended that the City establish explicit review standards in subsidy-related ordinances requiring examination of local tax and non-tax revenue delinquency status for corporations, organizations, and other entities applying for local subsidies when selecting recipients and determining subsidy amounts. It also recommended considering the reflection of delinquency records in subsidy performance evaluations.

Yoon Hee-yeon, Chairperson of the Busan Metropolitan City Audit Committee, stated, “We will work to strengthen the framework restricting subsidy support for delinquent taxpayers, thereby enhancing the effectiveness of the system. We will also strive to raise awareness among local subsidy recipients of their obligation to pay taxes and foster a culture of voluntary tax compliance.”