NABO Estimations & Tax Issues (Issue 6)
Published on 25 February 2019
Published by Estimates and Tax Coordination Division of the Estimates and Tax Analysis Office
I. Stocktaking of the Fiscal Demands of Legislative Bills Approved in 4Q 2018
Among the 442 legislative bills approved in the fourth quarter of 2018, there are 124 (28.1%) budget-related bills that affect national and local government finances. Enforcement of these bills are expected to result in an annual income decrease of 5 trillion 390.4 billion won on average and an annual expenditure increase of 3 trillion 531.4 billion won on average.
Ⅱ. Analysis of Major Policy Issues related to Estimation and Taxation
·This part includes analyses on major changes and additional fiscal demands of welfare-related mandatory expenditure programs within the confirmed budget of 2019, such as child allowances, basic pensions, employment insurance and patriotic gratuities.
·The next part provides an overview of the system and fiscal status of the health insurance and long term care insurance systems along with the fiscal trend forecast for the next 10 years based on the condition that government plans such as strengthened coverage are incorporated.
·The following part examines the key amendments and characteristics of the revised Tax Act which was submitted by the government, proposed by legislators and confirmed by a resolution during the National Assembly Plenary Session on December 7-8th, 2018; and analyses the consequent tax benefits.
·The last part examines the main details of the local consumption tax rate and subsidy increases approved on December 8th, 2018, along with an analysis of its effects on local finances.
Ⅲ. Estimations and Taxation Trends in Korea and Overseas
·This part contains a summary of performance and trends related to national tax revenues in 2018.
·The next part contains a summary of the status of specific indicators within the taxpaying environment of each country including Korea as of 2017, based on Paying Taxes 2019 published by the World Bank.
·The following part examines the main details of the Canada Pension Plan (CPP) reform that was pursued in June 2016.
·The subsequent part includes an analysis of the legislative bills enacted to introduce alternative service for conscientious objectors due to reasons including religious faith as well as associated additional fiscal demands.