NABO Estimates & Tax Issues (Issue 8)
Published on 30 August 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 2Q 2019
Among the 110 legislative bills approved in the second quarter of 2019, there are 42 (38.2%) budget-related bills that affect national and local government finances. Implementation of these bills is expected to result in an annual expenditure increase of 158.3 billion won on average, over the next five years (2020~2024).
Ⅱ. Analysis of Major Policy Issues Related to Estimation and Taxation
·An analysis of the performance related to total revenues in FY2018 was conducted in two categories—performance in terms of national tax revenues and performance in terms of non-tax revenues.
· An introduction is made on the system and financial status of the NPS and Teachers‘ Pension. A projection of financial transformation over the next 10 years is also made on the scenario in which government plans, such as reinforced coverage, are incorporated.
·Regarding national tax payment data and corporate micro-data, the reasons behind the gap between nominal and effective corporate tax rates in Korea was observed, along with an analysis of relevant factor-specific impacts.
· An examination was conducted on major factors that influence general property tax revenues,such as increased disclosed prices and the enforcement of the revised Gross Real Estate Tax Act, and an estimation of the general property tax sources in 2019 was conducted based on recent performance.
Ⅲ. Estimations and Taxation Trends in Korea and Overseas
·A summary is provided of the track record and trends of recent national tax revenues.
·A summary is provided of the track record and trends of local tax revenues in 2018.
·An introduction is made of the main content of the Tax Act Revision, which will be examined during the 2019 regular sessions.
·Based on the OECD‘s Consumption Tax Trends 2018, an introduction is provided of OECD members‘ status and institutional reforms related to value-added tax, energy and sales taxation.
·A summary is provided of the fiscal demands following the raised minimum wage as well as the revision trends of the Minimum Wage Act.
·A summary is provided of the details and main issues regarding The First Comprehensive Plan for the National Health Insurance released by the Ministry of Health and Welfare in May 2019.