재정분권 강화를 위한 합리적 세제개편 방안

Abstract

This study focuses on the tax reform for fiscal decentralization in Korea. In Chapter 1, we present the purpose and methods of this study. In Chapter 2, we study the circumstances of fiscal decentralization and the problems of fiscal structure in Korea. The fiscal state and problems in Seoul Metropolitan City will be analyzed in Chapter 3. In Chapter 4, the financial relations between the central and local governments, and the local tax system in Korea, and suggest the tax reform solution for the improvement of fiscal decentralization. This study reviews the theoretical and historical background of fiscal decentralization by the survey of relevant literature. Also, we study the major characteristics of the allocation system of tax base between the central and local governments, and analyze the structural problems of local finance in Korea. First, the Korean tax system is concentrated heavily on the national taxes as 80% of the total tax revenue. Thus the central government plays a vital role in resource allocation. Secondly, the local tax revenue is distributed unevenly among local jurisdictions. The regional inequality in revenue-raising capacity is a major policy obstacle to redesign the local tax system depends heavily on the property-related taxes, lack of elastic revenue-raising capacity. Therefore, the overall reform of local tax system revising the allocation of tax bases between the central and local taxes is needed for the fiscal decentralization. In this study, we propose mainly the adjustment between the national and local taxes. We studies liquor tax, transportation-energy-environment tax, transfer income tax and special consumption tax. Also, the improvement of local income tax and local consumption tax will be studied and the effect of the reform in these taxes on the local finance will be simulated. Finally, we suggest an organization for the prior consultation between the central and local governments, because it is important to adjust interests between the two parties before the central government makes local policy decisions.