AN EVALUATION OF THE TAX REFORM FOR A VALUE-ADDED TAX IN KOREA WITH SPECIAL REFERENCE TO DISTRIBUTION OF TAX BURDEN, ADMINISTRATIVE EFFICIENCY, AND EXPORT.

摘要

This dissertation attempts to evaluate the consequences of the tax reform which substituted a value-added tax for eight indirect taxes in Korea.; The primary interest of this study is to assess whether any change has occurred in the size distribution of tax burdens as a result of the VAT substitution. The tax burden study is based on an intertemporal comparison design as well as a single period comparison design. The empirical study under the framework of differential incidence and partial equilibrium shows that the adoption of the VAT system has not significantly affected the mildly regressive nature of the tax burden distribution. It reflects that the VAT system was designed for an equal yield substitution and that the economic base of the previous and new indirect systems is the private consumption. According to the single period comparison design, the distribution shape of the new tax system is almost parallel to that of the previous indirect tax system implying that the change in the level of income and pattern of consumptions has worked considerably in determining the burden distribution rather than the structural change in the tax rates. As a result of exemptions on non-processed agricultural products and other necessities, the regressive nature of the VAT has been mitigated, while the initial effort to lower the VAT rate to 10 per cent and the zero rating at the broad expenditure category has not significantly contributed to reducing the regressivity of the VAT.; The basic structure and procedure of the indirect tax system appears to have been simplified because of the integrated form of the VAT. But a major criticism on the VAT has resulted from administrative problems in the implementation process, particularly in coping with small taxpayers. The special treatment for the small taxpayers based on the turnover basis has caused administrative and compliance problems. A success of the VAT largely depends upon the extent to which the problems can be overcome.; Though there is no significant difference, in principle, in the refund system on the export goods between the VAT and previous systems under GATT, the new VAT system provides the administrative advantage in calculating indirect tax rebates because of the zero rating technique.