home Publications

Periodicals

Cost Estimates & Tax Issues

Title NABO Cost Estimates & Tax Issues (No. 3)

  • Views
    65
  • Date
    2018-04-30
NABO Cost Estimates & Tax Issues (No. 3)

I. Review of the Fiscal Demands of Bills Approved in 1Q 2018
In the first quarter of 2018, a total of 258 legislative bills were approved, 91 (35.3%) of which have an impact on the finances of national and municipal governments. The implementation of the relevant laws is expected to result in an annual decrease of 16.8 billion Korean won in revenue and a 5 trillion 17.5 billion won increase in spending on average.
 
Ⅱ. Analysis of Major Policy Issues Regarding Taxation Estimates
 ·Provided the status of legislation related to pregnancy, birth and child support for children under school-age; as well as the additional fiscal demands of major budget-related bills.
 ·Examined the recovery support scheme for damaged residences under recent discussion regarding the earthquake in Gyeongju. The report also analyzed the additional fiscal demands of pending budget-related legislative bills such as increasing the amount of disaster funding as well as the mandatory purchasing of a storm and flood insurance policy.
 ·Examined the status of investment funds that have not been repatriated after accomplishing economic performances through foreign direct investment, and examined taxes imposed on dividends overseas earned by foreign branch offices to explore their implications on ways to repatriate the earnings of Korean corporations through foreign direct investment.
 ·Examined the core issues of the Comprehensive Real Estate Tax, namely the tax increase factor (upward adjustment of the ratio of fair market value) and tax decrease factor (increase of the reference value of housing tax to 300 million won), and analyzed their consequent effect on tax revenues.
 
Ⅲ. Tax Trends in Korea and Abroad
 ·The national tax revenue in 2017 was 265.4 trillion won, 22.8 trillion won (9.4%) higher (14.3 trillion won higher than the supplementary budget) than the previous year. This was brought about by the improvement of corporate profits and private consumption, specifically thanks to the strong increase in revenues of certain types of tax such as corporate tax, income tax and value-added tax.
 ·Examined issues including the crypto-currency transaction trend, and analyzed the method and level of taxation necessary to meet the policy objectives of easing overheated speculation, improving tax equity and supporting the development of blockchain technology, via case studies of taxation in other major economies.
 ·Provided an introduction to the background and key points of the recent safeguards and tariff-imposing practices related to the increased trade protectionist measures undertaken by the US; reviewed discussions on the possible adjustment of tariff rates such as tariff escalations regarding exports to the US; and proposed the development of measures including a diversification of markets and strategy.
 ·Provided an introduction and comparison of the Earned Income Tax Credit and Child Tax Credit in Korea and other major economies.
  List     
footer
faceboock top