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Local Autonomy and Local Tax Policy in Korea
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Appendix
Local expenditure Ratio of expenditure to GDP
Local
Source: Ministry of Finance, Budget summary reference, Every year.
Ministry of Administration, Local finance Chronology, Every year.
[Appendix II-1] Change of size of local finance(1980~2013)
(Unit: billion KRW, %)
Appendix
63
total
local tax non-tax revenue transferred revenue
share of local amount share amount share amount tax
share
2007 118,243 43,532 36.8 31,973 27.0 41,956 35.5 21.3 - 14.1 0.7
2008 133,040 45,835 34.5 34,689 26.1 51,206 38.5 23.4 - 15.1 1.0 Source: Ministry of Administration, Local finance, Every year
[Appendix II-2] Composition of local government revenue – general account (1980~2013)
(Unit: billion KRW, %)
Local Autonomy and Local Tax Policy in Korea
development civil defence amount share amount share amount share amount share
1980 1,730 646 37.4 266 15.4 789 45.6 28 1.6
Source: Ministry of Administration, Local finance, Every year
[Appendix II-3] Composition of local government expenditure – general account (1980~2013)
(Unit: billion KRW, %)
Appendix
65
Local government revenue
share of local tax revenue
local finance independence index
1995 48,642 41.8 77.9
2000 74,347 35.4 73.6
2005 122,298 37.8 72.3
2010 173,849 37.1 68.5
2013 205,426 33.2 67.8
Source: Ministry of Administration, Local finance, Every year.
[Appendix IV-1] (Local tax/local government ravenue) ratio and Local finance independence index – general account
(Unit: billion KRW, %)
Local Autonomy and Local Tax Policy in Korea revenue in that government’s
total revenue
-Average 74.81 17.44 7.75 83.61 44.54 42.42
Unitary
-Korea* 84.51 15.49 81.62 32.59
Luxembourg
Average 88.15 11.85 85.90 36.38
Note : * The shares of each government tax revenue total tax revenue of Australia, Japan, Mexico, Holland, Poland are for 2012, each shares of each government tax revenue in that government’s total revenue of Israel, Korea, Mexico are for 2011, Canada for 2010.
Source: OECD, Fiscal Decentralization DB, http://www.oecd.org/tax/federalism/oecdfiscaldecentralisationdata base.htm 2015. 10. 19.
[Appendix IV-2] Local tax revenue – OECD countries
(Unit: %)
Appendix
Flexible tax rate
application deciding gov ranges of tax rates
Acquisition tax 13,317,603 ◯ Local gov ±50%
Registration and
license tax 1,311,947 ◯ Local gov (real estate registration) ±50%
Leisure tax 1,041,498 X -
-Tobacco
consumption tax 2,782,429 ● Central gov ±30%
Local
consumption tax 3,141,814 X -
-Resident tax 317,519 ◯ Local gov
- per corporate: ±50%
- per ndividual: less than 10,000 KW - pro rata property: less than 250 KW special fiscal demand, disaster)
Car tax 6,747,257 ◯ Local gov - tax for holding an automobile:
(Exclude education tax piggy- backed on leisure tax)
Note: 1) By Income tax law article 94.1.5 individual local income tax to capital gains such as derivatives, can be decreased under limit of 50% of the tax rate, when necessary for growth of capital market, by a Presidential decree.
Source: 1. Ministry of Administration, 2014 local tax statistics, 2014.
2. Local tax law, Office of Legislation homepage, http://www.moleg.go.kr/, 2015. 10. 21.
[Appendix IV-3] Flexible tax rate system
(Unit: million KRW)
Local Autonomy and Local Tax Policy in Korea
68
the same year 2 years later
increase of local tax income +100
-basic revenue 0
-adjusted revenue 0 +80
fiscal shortage 0 -80
distribution of general grant tax1) 0 -70
local government revenue +100 -70
Note: 1) Assuming the adjuatment rate = 0.867, and ignoring the influence of increase of a region’s local tax revenue to the sum of local governments’ fiscal shortage
[Appendix IV-4] Change of local government tax revenue due to increase of local tax
[Appendix IV-5] Regional distribution of local tax revenue per person
1995 2000 2005 2010 2013
National average 343 447 761 1,012 1,071
Seoul 424 627 1,020 1,233 1,308
Busan 318 391 643 897 993
Daegu 333 375 618 743 871
Incheon 332 410 687 912 1,010
Gwangju 293 358 546 730 806
Daejeon 349 406 637 774 817
Ulsan - 458 797 1,137 1,252
Sejong - - - - 1,802
Gyeonggi 412 509 861 1,132 1,096
Gangwon 274 335 607 831 887
Chungbuk 281 323 567 867 922
Choongnam 264 344 751 1,034 1,081
Jeonbuk 239 281 468 724 811
Jeonnam 199 282 506 824 908
Gyeongbuk 270 348 607 854 971
Gyeongnam 311 356 674 1,055 1,108
Jeju 336 458 754 980 1,349
coefficient of variation1) 0.19 0.23 0.21 0.17 0.17
max/min1) 2.13 2.23 2.18 1.70 1.67
max1) 424(Seoul) 627(Seoul) 1,020(Seoul) 1,233(Seoul) 1,349(Jeju) min 199(Jeonnam) 281(Jeonbuk) 468(Jeonbuk) 724(Jeonbuk) 806(Gwangju) Note: 1) excluded Sejong city
Source: National statistics portal, http://kosis.kr/, 2015. 10. 24.
(Unit: 1,000 KW, times 1)
Appendix
69
local tax revenue per person
(region/national average) changes
1995 2000 2005 2010 2013 1995～
2005 2005～
2010
1995～
2013
National average 1.00 1.00 1.00 1.00 1.00 - -
-Seoul 1.24 1.40 1.34 1.22 1.22 0.10 -0.12 -0.01
Busan 0.93 0.88 0.84 0.89 0.93 -0.08 0.04 0.00
Daegu 0.97 0.84 0.81 0.73 0.81 -0.16 -0.08 -0.16
Incheon 0.97 0.92 0.90 0.90 0.94 -0.06 0.00 -0.02
Gwangju 0.85 0.80 0.72 0.72 0.75 -0.14 0.00 -0.10
Daejeon 1.02 0.91 0.84 0.77 0.76 -0.18 -0.07 -0.25
Ulsan - 1.03 1.05 1.12 1.17 - 0.08 1.05
Sejong - - - - 1.68 - -
-Gyeonggi 1.20 1.14 1.13 1.12 1.02 -0.07 -0.01 -0.18
Gangwon 0.80 0.75 0.80 0.82 0.83 0.00 0.02 0.03
Chungbuk 0.82 0.72 0.75 0.86 0.86 -0.07 0.11 0.04
Chungnam 0.77 0.77 0.99 1.02 1.01 0.22 0.03 0.24
Chungbuk 0.70 0.63 0.62 0.72 0.76 -0.08 0.10 0.06
Chungnam 0.58 0.63 0.67 0.81 0.85 0.09 0.15 0.27
Gyungbuk 0.79 0.78 0.80 0.84 0.91 0.01 0.05 0.12
Gyungnam 0.91 0.80 0.89 1.04 1.03 -0.02 0.16 0.13
Jeju 0.98 1.02 0.99 0.97 1.26 0.01 -0.02 0.28
coefficient of variation1) 0.01 -0.04 -0.02
max/min1) 0.05 -0.48 -0.46
Note: 1) Sejong was excluded in calculation of coefficient of variation and (max/min) ratio change Source: National statistics portal, http://kosis.kr/, 2015. 10. 24.
[Appendix IV-6] Changes in local tax revenue per person(1995～2013)
(Unit: times 1)
Local Autonomy and Local Tax Policy in Korea
70
(1) fiscal capacity
index based on local tax
(2) (+general grant tax)
(3) (+(general+
real estate) grant tax)
(4) (+(general+
real estate+
decentralization) grant tax)
(5) (+local grant
tax)
Seoul 1.01 1.01 1.02 1.04 1.04
Busan 0.68 0.96 0.99 1.03 1.05
Daegu 0.56 0.95 0.97 1.01 1.02
Incheon 0.80 0.98 1.00 1.02 1.04
Gwangju 0.58 0.95 0.97 1.01 1.02
Daejeon 0.64 0.96 0.98 1.01 1.03
Ulsan 0.84 0.98 1.00 1.02 1.03
Sejong 0.28 0.92 0.94 0.97 1.01
Gyeongi 0.86 1.02 1.03 1.05 1.06
Gangwon 0.22 0.91 0.93 0.95 0.97
Chungbuk 0.30 0.92 0.94 0.97 1.01
Chungnam 0.37 0.93 0.95 0.97 0.98
Jeonbuk 0.26 0.92 0.94 0.97 0.98
Jeonnam 0.19 0.91 0.93 0.95 0.96
Gyeongbuk 0.25 0.92 0.93 0.96 0.97
Gyeongnam 0.51 0.95 0.96 0.98 0.99
Source: Ministry of Administration, 2013 general grant tax result, 2013.
, “2013 local government real estate grant tax distribution result,” 2013.
, 2013 decentralization grant tax result, 2013.
[Appendix IV-7] Change of fiscal capacity index due to distribution of the local grant tax(2013)
(Unit: times 1)
Appendix
71
tax revenue per person Ratio of tax revenue per person compared to the national average
total
min Gyeongbuk Gyeongnam Gyeongbuk
Source: National statistics portal, http://kosis.kr/, 2015. 10. 24.
Ministry of Administration, 2014 local tax statistics, 2014.
[Appendix IV-8] Distribution of local income tax revenue(2013)
(Unit: 1,000 KW, times 1)
Local Autonomy and Local Tax Policy in Korea
72
[Appendix IV-9] Flow of general grant tax calculation
Submit data Calculation of basic demand (measure unit*unit cost*modifization factor)
Calculation of basic revenue (80% of general tax revenue)
+ +
Addition of adjusted demand Addition of adjusted revenue
○ general metropolitan revenue sharing and adjusted amount
○ collection grant and adjusted amount
○ local election cost fiscal demand supplement
○ regional balance demand such as old age supplement
○ 80% of object tax and ordinary extra income
○ collectied grant and adjusted amount
○ 80% of general mediation grant and adjusted amount
○ 80% of collect grant and adjusted amount
○ 80% of local tax and ordinary extra income and adjusted amount
○ 80% of real estate grant tax and adjusted amount etc.
± ±
Self-effort incentive(Demand) Self-effort incentive(Revenue)
⇓ ⇓
Calculate standard fiscal demand Calculate standard fiscal revenue
Fiscal shortage
Apply adjustment
rate
Calculation of general grant tax
Source: Ministry of Administration, 2015 local grant tax calculation, 2015.
Appendix
73
[Appendix IV-10] Change of local government fiscal capacity index due to local grant tax
fiscal capacity index
based on local tax +general grant tax +local grant tax Source: <Appendix IV-7>