"Hundreds of doctors have received pharmaceutical rebates"

"Income taxes will be imposed on them"

Min Juwon, Director of Audit at the National Tax Service (NTS), says, "Medical-Pharmaceutical cartel is a grave problem…medical professionals have the superior status"

"The rebate audit is unrelated to the current medical crisis"

Min Juwon, Director of Audit at the National Tax Service (NTS).

After conducting a tax audit of 16 pharmaceutical companies, Korea's National Tax Service (NTS) announced that it would impose an income tax for doctors who received rebates.

 

The NTS mentioned that over hundreds of doctors received rebates, and rebate-associated medical-pharmaceutical cartels became a significant issue.

 

As a result, the NTS will continue to conduct intense tax audits.

 

The following article reconstructs the briefing by Min Juwon, Director of NTS Audit, held on Septebmer 2nd in a question-and-answer format.

 

- Min said the current audit focuses on imposing income tax on medical professionals who had received rebates. We impose income taxes on doctors who received rebates in any form.

 

Because the customary way of rebates between the medical and pharmaceutical industries has continued for an extended period, the NTS has been paying attention and continuously conducting tax audits.

 

During previous tax audits, we tried identifying the final recipients of rebates through pharmaceutical companies, but we could not confirm the allegations by solely relying on hearsay.

 

However, this round of tax audits focused on eradicating rebates by imposing taxes on individuals who received rebates.

 

- How were the companies selected for audits? We have not focused on whether the audited pharmaceutical company has been prosecuted by the Fair Trade Commission (FTC).

 

The NTS selected companies that have internal issues.

 

Once audits are completed, we plan to decide whether we will share audit outcomes with other agencies, according to regulations.

 

Regarding the rebates being investigated by the prosecution and the Korean National Police Agency, we expect them to cooperate with the NTS regarding tax issues.

 

When we receive documentation, we plan to investigate tax issues and impose on it thoroughly.

 

-Some argue that the tax audit has a political agenda amid the conflict between the medical community and the government. Before today's announcement, we were aware of the concern.

 

According to the law, the NTS conducts audits within the National Tax Imposition Exclusion Period, defined as the past five years.

 

The NTS conducts audits of allegations within the designated period.

 

Moreover, individuals who are involved in medical conflicts are not being audited.

 

Audits are being conducted in individuals across the nation, including primary, secondary, and tertiary medical centers.

 

We want people to know that the NTS focuses on rebates rather than the current issues related to the medical community.

 

The conflict between the medical community and the government is recent.

 

Auditing takes time because companies have to report, the NFS analyzes them, and commences on audits.

 

Consequently, we are focusing on records dating 3-4 years back.

 

For this audit, we have not collaborated with the Ministry of Health and Welfare (MOHW) in any form.

 

We have conducted the audit based on NTS criteria for selecting auditing subjects and identified the degree of tax invasion.

 

- How many medical professionals have received rebate?

 

Subjecting companies that are being audited, hundreds of medical professionals have received rebates.

 

If we continue, the number is expected to increase.

 

- Min stated the medical-pharmaceutical cartel is a grave problem.

 

Medical professionals are of superior status to pharmaceutical companies.

 

When a certain pharmaceutical company names rebate recipients, it will no longer be able to operate in South Korea.

 

As a result, we used the word, "medical cartel." It is a grave problem.