This report investigates tax assignment of central and local taxes in Korea based upon three principles of local tax: no tax-exporting; benefit taxation; and price signal of local expenditure. Currently, local income tax is levied on corporate income, dividend, and interest income. It is suggested that these taxes be assigned to the central government. It is also suggested that the registration tax be assigned to the central government since its revenue is concentrated around the Seoul metropolitan area, and there is so strong reason why it should be a local tax.
The loss of local tax revenue caused by this adjustment can be compensated by transferring a part of VAT or fuel consumption tax to local governments. This study shows that this arrangement results in a significant increase in the local tax revenue of the local governments outside Seoul metropolitan area. When the tax revenue increase is matched by the reduction of general grants, the fiscal soundness of these local governments is also significantly improved.
- 국세와 지방세의 조정방안(A study on the tax assignment between central and local governments)
국세와 지방세의 조정방안(A study on the tax assignment between central and local governments)
서울 : 한국조세연구원
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Economic Administration|