지방소비세 확대에 따른 지방세입 형평화 효과 분석과 시사점

This study focuses on the increase of the statutory rate of the local consumption tax(LCT). It is one of the measures of the revenue decentralization which is getting attention recently. The revenues of local governments will be swelled by increasing the statutory rate of LCT. However, not all local governments are in favor of raising the LCT rate, because the effects of it will appear differently in each local government. The purpose of this study, therefore, is to analyze the effects of it on local governments’ revenues and to investigate ex-ante problems that may arise when the LCT rate is raised in the future. Since LCT is allocated to metropolitan local governments, like Metropolitan cities and Provinces, raising the LCT rate can be misunderstood to be affecting their revenues only. However, it also affects the revenues of municipality level, like cities, counties and autonomous districts, because it leads to a decrease in the amount of local share tax. In addition, it reduces the revenues of metropolitan local governments due to the increased grants to municipalities and the increased transfer to local education authorities, which is funded by the metropolitan local governments. For municipalities level, it results in increased revenues because of increased grants from upper level of local governments. Taking into account these effects, the changes in the local governments’ revenues due to the expansion of LCT appear differently for the types of local governments. The main findings of the study are as follows. First, the increase in LCT expands the tax revenues of metropolitan local governments, but there is no significant raise in the revenues of them, due to the reduced local share tax, the increased grant to municipalities and the increased transfer to local education authorities. Secondly, the significant revenue expansion effect occurred largely in the municipalities, not in the metropolitan local governments. Thirdly, except for the metropolitan local governments, the equalization of the revenues of municipality level has deteriorated after the expansion of LCT. Considering these points, it is necessary to derive an irrational problems in the distribution mechanism of LCT and to implement policies to solve these problems.