콘텐츠 바로가기
로그인
컨텐츠

Category Open

Resources

tutorial

Collection of research papers and materials on development issues

home

Resources
Economy Financial Policy

Print

Improving tax expenditure : From the perspective of an integrated fiscal system

Related Document
Frame of Image 
Youngwook Lee, Fellow at KDI
“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.”
. Ⅰ Introduction
Policies supporting diverse groups and areas are expanding in the form of tax expenditures, such as tax deductions and credits, independently from direct expenditures. For example, the earned income tax credit (EITC) and child tax credit (CTC)–refundable tax credit–for the working poor and households with children were introduced, and an array of tax credits to encourage employment and attract investment have been implemented. A considerable advantage of tax expenditure is that its operation relies on the
* Lee, Youngwook, “Improving Fiscal Accountability of Tax Expenditures: Focusing on Income Tax Expenditure,” in Heesuk Yun (ed.), Enhancing Fiscal Sustainability through Strengthening Fiscal Accountability, Research Monograph 2016-06, Korea Development Institute, 2016 (forthcoming) (in Korean).
KDI FOCUS
2
existing tax system and as such, is highly efficient in terms of administration. Indeed, using the information filed at the time of declaration, the government can implement tax expenditures w


Full Text
Title Improving tax expenditure
Similar Titles
Sub Title

From the perspective of an integrated fiscal system

Material Type Reports
Author(English)

Lee, Youngwook

Publisher

Sejong, South Korea:Korea Development Institute

Date 2017-03
Series Title; No KDI Focus / No. 81, eng.
Pages 10
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Holding Korea Development Institute
License

Abstract

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)