Seoul – The balance of minor savings accounts at major South Korean banks has surged by over 20% in the past four years, raising concerns about potential tax evasion.
According to data submitted by five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) to Rep. Jin Sun-mi of the Democratic Party, the total balance of minor savings accounts (including both won and foreign currency) reached 7.8 trillion won ($5.9 billion USD) as of the end of last year. This represents a 4.6% increase from the end of 2023 and a substantial 20.2% jump from the end of 2020.
High-Value Accounts on the Rise
While the majority of accounts hold less than 10 million won, there has been a notable increase in high-value accounts. As of the end of last year, there were over 1,800 accounts with balances exceeding 100 million won, including some with over 10 billion won.
The number of accounts with balances over 500 million won increased from 136 in 2022 to 145 last year, with the total balance of these accounts rising by 11.4% to 150.2 billion won. The average balance per account in this category now exceeds 1 billion won.
Concerns About Tax Evasion
The surge in high-value minor savings accounts has prompted concerns about potential tax evasion through illegal wealth transfers. Rep. Jin Sun-mi called for an investigation into the possibility of such activities and suggested strengthening gift tax reporting standards for deposits exceeding a certain amount.
Overall Account Numbers Decline
Despite the increase in total balance and high-value accounts, the overall number of minor savings accounts has actually decreased in recent years, from 5.27 million at the end of 2020 to 4.84 million at the end of last year. This has led to a significant increase in the average balance per account, from 1.23 million won in 2020 to 1.61 million won last year.
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