The National Assembly Budget Office (NABO) published the Casebook of 2012 Tax Law Revision Cost Estimates. The cost estimate system was introduced in full scale through the revision of the National Assembly Act in July 2005 in an aim to identify the impact of the enactment and revision of finance-related laws on national finance. NABO provides cost estimates for over 190 tax law revision bills a year to National Assembly members and committees, while also publishing the casebook compiled with its expertise and experience accumulated through bill cost estimation. The first part of the casebook analyzes cost estimate statistics for tax law revisions from different angles to help readers easily grasp an understanding of how cost estimation works; and the second part introduces 23 cases among cost estimate reports for tax law revision bills created by NABO in 2012 to improve the understanding and support activities of aides of National Assembly members and related public officials about tax law revision cost estimation.
NABO was commissioned to develop cost estimate reports for a total of 193 tax law revision bills in 2012. The following are some notable facts.
First, when sorted by law, the Restriction of Special Taxation Act ranked first with 95 reports (49.2%), followed by the Income Tax Act with 33 reports (17.1%) and the Local Tax Act with 19 reports (9.8%). When sorted by bill type, taxation support bills for taxi fuel expenses and vehicle purchase costs ranked first with 11 reports, followed by bills for the expanded application of the minimum tax rate for corporate tax, etc. and the tax rate increase with 9 reports. In terms of tax revenue, tax revenue reduction bills stand at 134 (69.4%), 2.7 times higher than tax revenue expansion bills, which total 50 (25.9%).
Second, when focusing on tax expenditures, 108 of the commissioned bills (56%) involved the enactment and revision of non-taxation and tax exemption provisions. As many as 41 dealt with the expansion of tax exemptions (38.0%); 34 with the extension of sunset clauses (31.5%); 30 with the new application of tax exemptions (27.8%); and 1 with tax exemption cuts (0.9%). Once these bills related to tax expenditures are all passed and enforced, the accumulated decrease in tax revenue from 2013 through 2017 is expected to reach 158.8 trillion KRW.
Third, regarding the number of cost estimate reports actually put into use, 61 bills among the 193 attached with cost estimate reports were proposed (bill proposal rate of 32%). The quotation rate of NABO's cost estimate reports during the examination stage of the National Assembly Standing Committee stands considerably high at 83%.
NABO plans to support parliamentary politics through accurate, expert cost estimations and thereby enhance the efficiency of national finance. NABO needs to focus its resources on research and development of tax revenue estimation techniques to increase the accuracy of its estimations and on the documentation of basic analysis frameworks and different estimation techniques to ensure prompt estimations.
Revenue Estimates Division
NABO was commissioned to develop cost estimate reports for a total of 193 tax law revision bills in 2012. The following are some notable facts.
First, when sorted by law, the Restriction of Special Taxation Act ranked first with 95 reports (49.2%), followed by the Income Tax Act with 33 reports (17.1%) and the Local Tax Act with 19 reports (9.8%). When sorted by bill type, taxation support bills for taxi fuel expenses and vehicle purchase costs ranked first with 11 reports, followed by bills for the expanded application of the minimum tax rate for corporate tax, etc. and the tax rate increase with 9 reports. In terms of tax revenue, tax revenue reduction bills stand at 134 (69.4%), 2.7 times higher than tax revenue expansion bills, which total 50 (25.9%).
Second, when focusing on tax expenditures, 108 of the commissioned bills (56%) involved the enactment and revision of non-taxation and tax exemption provisions. As many as 41 dealt with the expansion of tax exemptions (38.0%); 34 with the extension of sunset clauses (31.5%); 30 with the new application of tax exemptions (27.8%); and 1 with tax exemption cuts (0.9%). Once these bills related to tax expenditures are all passed and enforced, the accumulated decrease in tax revenue from 2013 through 2017 is expected to reach 158.8 trillion KRW.
Third, regarding the number of cost estimate reports actually put into use, 61 bills among the 193 attached with cost estimate reports were proposed (bill proposal rate of 32%). The quotation rate of NABO's cost estimate reports during the examination stage of the National Assembly Standing Committee stands considerably high at 83%.
NABO plans to support parliamentary politics through accurate, expert cost estimations and thereby enhance the efficiency of national finance. NABO needs to focus its resources on research and development of tax revenue estimation techniques to increase the accuracy of its estimations and on the documentation of basic analysis frameworks and different estimation techniques to ensure prompt estimations.
Revenue Estimates Division