Designed to support specific groups and fields, tax expenditures are rapidly expanding, independently from direct expenditures with identical policy goals. However, without an integrated monitoring process, the interconnection between the two can sometimes weaken the goals they both seek. As such, a database that covers all tax and direct expenditures should be built and used to comprehensively review the effectiveness of the programs.
- Policies supporting diverse groups and fields are expanding in the form of tax expenditures at a considerable scale, particularly in social welfare, industry, SME, and the agriculture and fisheries sectors.
- The EITC was expanded without being reviewed for its effectiveness, and the CTC was adopted in 2015.
- The EITC, a tax expenditure and the NBLS, a direct expenditure, are both designed to support the income and self-reliance of low-income households, but the interconnection between the two creates an income reversal wherein more work leads to less total income. (The rest omitted)
Improving tax expenditure
From the perspective of an integrated fiscal system
Sejong, South Korea:Korea Development Institute
|Series Title; No||KDI Focus / No. 81, eng.|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||Korea Development Institute|