Taxes spell additional problems for troubled shipbuilders

SEOUL, May 1 (Yonhap) -- Troubled local shipbuilders are now facing another problem with taxes that may further add to their record losses, company officials and market sources said Sunday.

Local leader Daewoo Shipbuilding & Marine Engineering Co. has recently been ordered to pay 32.5 billion won (US$28.5 million) in additional taxes, according to company officials.

The amount represents only a small fraction of the company's annual sales that came to nearly 13 trillion won in 2015, but the order to pay more taxes comes after the company posted a record loss of 5.13 trillion won in 2015 alone.

"The National Tax Service has told the company to pay the additional taxes following its recent tax probes," a company official said, asking not to be identified.

Daewoo Shipbuilding has already filed an objection, partly citing its record losses, the official added.

The NTS decision also comes amid a view that Daewoo Shipbuilding and two other leading shipbuilders here may be forced to lay off thousands of their workers this year just to stay afloat.

Together, the three leading local shipbuilders racked up a combined loss of over 7.7 trillion won last year. They include Hyundai Heavy Industries, which also has been ordered to pay an additional tax of 120 billion won.

Hyundai Heavy too has filed an objection.

"Companies, of course, must pay additional taxes if a tax probe finds problems in their books," a market observer said. "Still, a little more consideration may be appreciated for the shipbuilders right now as they are facing various problems that threaten their own existence."
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