The National Tax Service has lost over 2 trillion won ($1.8 billion) in tax litigations with corporates over the past four years, according to a report.

Rep. Park Myung-jae, a member of the ruling Saenuri Party and of the parliamentary committee of strategy and finance, said in a report on Monday that the tax office lost 32.7 percent of the litigations over the past four years, giving away 2.1 trillion won.

“Over 1.7 trillion won or 80.3 percent of the total amount was lost in suits involving 5 billion won or more,” the lawmaker said.

The ratio of cases lost to the total number of cases, too, was relatively high for these large-sum suits ― 36.5 percent in 2011, 30.8 percent in 2012, and 45.6 percent in 2013. The yearly losing ratio for overall tax litigations was 9.8 percent, 11.7 percent, and 13.5 percent during the same period.

These large-sum suits are usually filed by conglomerates, which hire top-ranking law firms, while the NTS frequently depends on its own lawyers or smaller-sized law firms, he explained.

To better respond to the tax litigations and the consequent financial damages, the tax office established a litigation bureau, enabling its affiliated officials to devote themselves to litigations.

“Legitimate taxation should be upheld and it is the role of our ligation officers to defend this cause to the best of our ability,” said NTS commissioner Lim Hwan-soo at the bureau’s launch ceremony earlier this month.

But Rep. Park pointed out that the NTS, while reinforcing its post-facto litigation response system, should be more cautious when imposing tax penalties in the first place.

“Taxation should be strict and fair, but excessive tax administration should be avoided in order to minimize the losses to the exchequer.”

By Bae Hyun-jung (tellme@heraldcorp.com)