The Tax System in Korea: More Fairness and Less Complexity Required

Thomas Dalsgaard ()

No 271, OECD Economics Department Working Papers from OECD Publishing

Abstract: The tax burden in Korea is among the lowest in the OECD area, mainly reflecting that the social safety net is at an early stage of development. The low tax burden implies limited tax induced economic distortions but as expenditure pressures will mount in the future, neutrality and efficiency of the tax system will have to be substantially improved if more sizeable deadweight losses are to be avoided. Some progress have been made over the past decades in terms of broadening parts of the tax base and lowering rates along the lines followed in many other OECD countries, but a number of weaknesses remain. These include overly generous allowances for individuals, large-scale and wide-ranging tax preferences for enterprises, an inappropriate taxation of property and a lack of strong and uniform tax enforcement. Main directions for reform should include a significant broadening of the bases for personal and corporate taxation as well as in the VAT system; increasing holding taxes on real estate while reducing ... La charge fiscale en Corée est parmi les plus faibles de la zone de l’OCDE, ce qui s’explique essentiellement par le fait que le filet de protection sociale n’est pas encore très développé. Du fait de la faiblesse de la charge fiscale, les distorsions économiques induites par l’impôt sont limitées mais à mesure que les pressions en faveur d’une augmentation des dépenses se renforceront à l’avenir, il deviendra nécessaire d’améliorer sensiblement la neutralité et l’efficience du système fiscal si l’on veut éviter des pertes sèches plus importantes. Des progrès ont été réalisés au cours des dernières décennies dans le sens d’un élargissement de certains éléments de la base d’imposition selon des orientations adoptées dans beaucoup d’autres pays de l’OCDE, mais un certain nombre d’insuffisances persistent. Parmi celles-ci, on peut mentionner des abattements excessivement avantageux pour les particuliers, des avantages fiscaux considérables et prenant des formes multiples en faveur ...

Keywords: Corée; fiscalité; Korea; politique fiscale; tax policy; taxation (search for similar items in EconPapers)
JEL-codes: H2 (search for similar items in EconPapers)
Date: 2000-12-06
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