The main purpose of taxation is to raise funds for national finance. Taxation significantly impacts economic activity and income distribution of economic agents, which points to the tremendous need to devise a fair and efficient taxation system. To this end, it is necessary to first understand Korea's tax system and the tax reforms in advanced countries, and to identify issues that should be addressed to make reasonable changes to Korea's tax system. This explanatory report on the income tax, corporate tax, and value added tax, which are the primary sources of Korea's tax revenue, was drafted on the basis of the analysis of, evaluation of, and experience with Korea's tax system and tax law revisions. This report explains the theoretical background of the three backbone taxes and provides their legislation and revision history in an accessible way. In this report, the OECD tax statistics, the tax systems of major countries, the primary trends in their tax reforms, and the key matters for discussion are comprehensively compiled and compared along with the latest data. 


Tax Analysis Division