This report intends to analyse and assess 「2011 tax revision proposal」 submitted to National Assembly by the Administration.
Analytic dimension consists of three parts : economic effect, legal requirements, and tax revenue effects. Main issues dealt with includes the retraction of scheduled tax cuts, imposing tax on commercial transactions between parent and subsidiary company, conversion from temporary investment tax credit to job creation tax credit and so on.
The assessment concludes that the proposal is generally compatible with the changing economic circumstances. However, discordance among policy directions, questionable effectiveness and suitability of some tax expenditure items still exists.
Revenue analysis for the 4 years from 2012 to 2015 shows the tax reduction by the proposal such as extending sunsets of tax expenditures etc. outweighs tax increase such as retracting tax cut by 8.5 trillion won.
Analytic dimension consists of three parts : economic effect, legal requirements, and tax revenue effects. Main issues dealt with includes the retraction of scheduled tax cuts, imposing tax on commercial transactions between parent and subsidiary company, conversion from temporary investment tax credit to job creation tax credit and so on.
The assessment concludes that the proposal is generally compatible with the changing economic circumstances. However, discordance among policy directions, questionable effectiveness and suitability of some tax expenditure items still exists.
Revenue analysis for the 4 years from 2012 to 2015 shows the tax reduction by the proposal such as extending sunsets of tax expenditures etc. outweighs tax increase such as retracting tax cut by 8.5 trillion won.
Tax Analysis Team