Understanding Taxation and Its Issues 2016
Published June, 2016
Taxation, as a major source of revenue for national finances, has a substantial impact on income distribution as well as the economic activities of individuals and businesses. However, due to sluggish economic growth and growing demands for welfare and economic policies, fiscal spending has recently risen faster than tax revenues in countries across the world, posing a threat to fiscal soundness. To address this issue, many nations are working to reform their spending structures and secure additional revenue, while ensuring that their tax reforms will not hurt the efficiency and fairness of their existing systems.
Under these circumstances, it is quite significant to understand the overall taxation scheme and monitor the tax reform trends of major economies, identifying possible directions and issues in debates on the best ways to reform Korea’s tax structures.
Since NABO released, in 2013, a series of Understanding Taxation and its Issues reports that summarized major facts and issues of tax items, it has continued to update them with annual systematic changes and the latest issues, thereby promoting their usability.
Of particular note is that, in order to commemorate the opening of the 20th National Assembly, the 2016 revision added a new Inheritance and Gift Tax Section as the people’s interest in these taxes is rising amid deepening wealth concentration and income inequality.
As securing revenue to fund growing welfare and economy-related demands, a desirable taxation scheme needs to be established more than ever. Therefore, we expect that this report will be fully utilized by National Assembly members during their discussions on tax-related legislation.