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Title Changes in Tax Environment and Policy Issues in line with the Fourth Industrial Revolution

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  • Date
    2020-06-09

Changes in Tax Environment and Policy Issues in line with the Fourth Industrial Revolution

 


Published on June 9, 2020
Published by Income & Corporate Tax Analysis Division, Estimates & Tax Analysis Department

 


The Fourth Industrial Revolution is an intelligent revolution based on hyper-connection, thus is expected to have a ripple effect that will reverberate through our society and the economy as a whole. In addition, as the value of digital platform-based untact technologies such as e-learning and telemedicine is newly emerging with the COVID-19 pandemic, the essence of the Fourth Industrial Revolution is likely to advance faster than previously expected.


As the global economic paradigm shifts towards digitization, companies that succeed through technological innovation will enjoy an accelerated growth while industries that fail to adapt to changes will be forced to undergo restructuring. Behind the rise of new business models, such as the gig economy and the sharing economy, are also concerns about the decline in jobs for low-skilled workers due to the rapid advancement in automation. Fundamental changes, such as the digitization of economic and industrial structures, are expected to bring about various policy environment changes as well. Accordingly, the need for changes in the policy paradigm to transform existing strategies while discovering new ones is also of increasing importance.


The purpose of this report is to summarize in a comprehensive manner the conclusions of diverse academic research works, focusing on tax policies among various environment changes following the advent of the Fourth Industrial Revolution. And also to examine the changes in the tax environment, preemptively suggesting guidance for policy improvements that Korea should pursue at this point. To this end, it examined the environmental changes in tax policies expected for the Fourth Industrial Revolution, such as increased international mobility of tax bases and changes in the labor market, from an integrated perspective. The NABO identified the major tax issues and concerns, and then proposed mid-to-long term tax policy recommendations.

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