農業租稅政策의 課題와 論理

Issues and Logic of Agricultural Taxation in Korea

Though Korea is rapidly becoming a modem industrial country, the agricultural sector is still a significant part of the economy, generating approximately 10 percent of GNP and employing 20 percent of the labor force. The purpose of the paper is to review and evaluate major issues surrounding agricultural taxation in Korea, dealing with taxation of agricultural income, properties, goods and services and transactions. The Criteria by which one can evaluate any tax system are allocative efficiency, distributional fairness, and admininstrative simplicity. From these perspectives the agricultural tax system in Korea is seriously flawed. The excessive allowance of tax expenditures to help disadvantaged agriculture and farmers not only distorts resource allocation between the agricultural sector and the nonagricultural sector as well as between the sectors within agriculture but also violates distributional equity between farmers and nonfarmers as well as between poor farmers and rich farmers. In Korea as in all other countries a great deal of problems are encountered in taxing farmers, one of the so-called hard-to-tax groups, simply because farmers do not keep any systematic records. One of the most salient and perennial problems facing the agricultural tax system in Korea lies in the regressivity of the tax burden. Establishing and practicing an ideal system of taxation is a challenging task but not an insurmountable one. What Korea needs in the agricultural taxation is tax design not tax reform. The most important pre-requisite for designing a good tax system is the recognition of the merits of a good tax system and a strong resolve to get rid of clear-cut irregularities in the present tax system. The current gap between tax law and practice must be removed if greater efficiency is to be achieved and prominent distributional inequities in the tax burden are to be corrected.