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Gov't to unveil long-term guidelines for taxation policies

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(Globalpost/GlobalPost)

SEJONG, July 17 (Yonhap) -- The government plans to unveil long-term guidelines on how it should collect and manage its tax revenue over the next five years as part of efforts to better manage its budget, government sources said Wednesday.

The guidelines are similar to the ones the government draws up for its long-term spending plan every five years, a move aimed at improving the efficiency of the national budget management.

"We will prepare and unveil mid- and long-term guidelines for taxation policies, including how to manage the tax cuts and exemption systems, and how to boost the overall tax revenue early next month, along with the annual tax code reform proposals," a finance ministry official said on condition of anonymity.

He added that the guidelines are aimed at helping the government better predict future economic and policy conditions in designing their taxation polices with a longer-term perspective.

To that end, the state-sponsored Korea Institute of Public Finance is expected to hold a public hearing next week to gather opinions from policymakers and experts.

The government has been pushing to expand its tax revenue base in order to meet growing fiscal demand in running its budget and provide more welfare benefits to the aging population.

The slowing economic growth, however, comes as a drag on the efforts, resulting in marked shortfalls in tax revenues collected by the government in recent months.

According to data provided by the National Tax Service, the government collected 82.13 trillion won (US$73.7 billion) in taxes during the January-May period, which is about 9 trillion won less than the same period a year earlier.

Corporate and value-added tax income dropped 17.9 percent and 7.2 percent on-year during the same period, the data showed.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130717/govt-unveil-long-term-guidelines-taxation-policies