Korea is introducing a new Importer Self-Assessment (ISA) program allowing companies the opportunity to file an annual ISA report in lieu of undergoing a Customs Assessment. It also provides the extra benefit of allowing VAT recovery on additional duties payable, which is an obstacle under the current system.
The reality of the ISA program is that it is practically impossible for customs to verify the legality of all import declarations due to the limited manpower of the auditors. Given this circumstance, customs audits were primarily focused on the collection of additional duties. This increased the number of objections and appeals filed against Customs, proving to be a burden for both businesses and tax collection.