This report intends to analyze and assess the “2012 tax revision proposals” submitted to the National Assembly by the Administration.
The analytic dimension consists of three parts: overall evaluations, economic effects of proposal items, and tax revenue effects.
The assessment concludes that the proposal is generally compatible with changing economic circumstances. However, myopic revision, questionable effectiveness, suitability of some tax expenditure items, and incomplete connections among policy directions still exist.
Main issues dealt with include lowering the taxable income threshold for global financial income tax, extending tax on capital gains to major shareholders, charging tax on financial derivatives transactions, improvement of job creation tax credit and R&D tax credit, long-term revision of pension and retirement income tax, revocation of heavy tax on capital gains in real estate, and sunset extension of traffic-energy-environment tax.
Revenue analysis for the 5 year period from 2013 to 2017 shows the tax reduction by proposals, such as revocation of heavy tax on capital gains in real estate and extending sunsets of tax expenditures etc., outweighs the tax increases, such as finding additional financial bases for taxation and increasing the minimum tax rate of corporate tax by 11.1 trillion won (2.9 trillion won in 2013, 3.1 trillion won in 2014).
Tax Analysis Division
The analytic dimension consists of three parts: overall evaluations, economic effects of proposal items, and tax revenue effects.
The assessment concludes that the proposal is generally compatible with changing economic circumstances. However, myopic revision, questionable effectiveness, suitability of some tax expenditure items, and incomplete connections among policy directions still exist.
Main issues dealt with include lowering the taxable income threshold for global financial income tax, extending tax on capital gains to major shareholders, charging tax on financial derivatives transactions, improvement of job creation tax credit and R&D tax credit, long-term revision of pension and retirement income tax, revocation of heavy tax on capital gains in real estate, and sunset extension of traffic-energy-environment tax.
Revenue analysis for the 5 year period from 2013 to 2017 shows the tax reduction by proposals, such as revocation of heavy tax on capital gains in real estate and extending sunsets of tax expenditures etc., outweighs the tax increases, such as finding additional financial bases for taxation and increasing the minimum tax rate of corporate tax by 11.1 trillion won (2.9 trillion won in 2013, 3.1 trillion won in 2014).
Tax Analysis Division