The budget for local government amounts to total 141 trillion and 39.2 billion won. Among them, self-generating revenue consists of local tax and non-tax revenue, issuing municipal bond and local subsidies, grants.
Recently, as local autonomy has to assume more responsibility for finance, each local government puts more effort to have enough resources in order to meet public needs. Thus, they shed light on independent financial resources, namely, local tax. However, despite of collective effort to strengthen fiscal authority for local government, distributed resources for local government are relatively smaller than those for central government. Local tax rose to 20 percent level in total tax revenue after 1990. Since tax base was not much secured because of limitation on levying tax, the previous level didn’t change for a long time.
The Local Tax Act was extensively revised in 2010. Previously, many local tax experts had pointed out this Act brought about excessively levying and collecting taxes. After revision, the Act was separated into Framework Act on Local Tax and Local Tax Act, Local Tax Expenditure Control Act. Previous 16 items of a tariff were simplified to 11, furthermore, Local Sales Tax and Local Income Tax were newly introduced in a bid to bolster local finance.
Therefore, this report mainly focused on current status and challenge regarding local tax, suggesting some constructive advices, in line with returning acquisition tax in a row, expanding shared property tax to metropolitan area and introducing Local Tax Expenditure Statement, etc.
Recently, as local autonomy has to assume more responsibility for finance, each local government puts more effort to have enough resources in order to meet public needs. Thus, they shed light on independent financial resources, namely, local tax. However, despite of collective effort to strengthen fiscal authority for local government, distributed resources for local government are relatively smaller than those for central government. Local tax rose to 20 percent level in total tax revenue after 1990. Since tax base was not much secured because of limitation on levying tax, the previous level didn’t change for a long time.
The Local Tax Act was extensively revised in 2010. Previously, many local tax experts had pointed out this Act brought about excessively levying and collecting taxes. After revision, the Act was separated into Framework Act on Local Tax and Local Tax Act, Local Tax Expenditure Control Act. Previous 16 items of a tariff were simplified to 11, furthermore, Local Sales Tax and Local Income Tax were newly introduced in a bid to bolster local finance.
Therefore, this report mainly focused on current status and challenge regarding local tax, suggesting some constructive advices, in line with returning acquisition tax in a row, expanding shared property tax to metropolitan area and introducing Local Tax Expenditure Statement, etc.
Lee Sejin