A Study on Cash Receipt System under the Tax Law
Asian Tax Journal Vol. 10 No. 1 (2009), pp. 205-222
Abstract
Because cash transactions take up a large percentage of the whole in our country, it is difficult to accurately grasp the tax basis for the self－employed, and therefore, there are limits to capturing the tax sources. This has been presenting an obstacle to the government’s policy to obtain a fair taxation system through impartial taxation, and the government finally adopted for the first time on January1st,2005, the cash receipt system in order to establish transparency with tax sources and fair taxation. At first, the cash receipt system was executed in order to integrate the society and to narrow the gap between the wealthy and the poor; however, in reality, the current cash receipt system is being utilized mainly by the consumers and small businesses that use small cash transactions. Even if the purpose behind a law’s legislation is legitimate and the method is appropriate, we must not overlook the fact that if the protected public good infringes upon the private good, it could be violating “the minimal infringement principles”, which is a part of the constitutional principle of prohibiting overabundance. Therefore, the following issues must be reformed in order to improve the effectiveness of the cash receipt system and utilize it in the right manner. First, it must be made mandatory for professional businesses and educational institutes to issue cash receipts even if the consumers do not request for cash receipts, and when this policy settles down, then it must be expanded to all cash receipt issuing businesses. Second, we must raise our interests on the main users of the cash receipts by expanding on the benefits of the annual income deduction for the wage earners, which have been reduced since the execution of this policy. Third, there are concerns about personal information leaks for cash receipt users, and therefore, we must improve the security system on personal information, so that consumers can request for cash receipts with a peace of mind. Fourth, we must improve the additional tax imposition on non－issuers of cash receipts, in order to rightly reflect the purpose behind this additional tax imposition. The improvement proposal laid out above will not provide a complete answer to the problems associated with the cash receipt system；however, we expect that it will provide the foundation on which the issue of fair taxation can build upon by solidifying and vitalizing the cash receipt system and also by securing data on taxation.
Keywords
- the cash receipt system
- transparency with tax sources
- fair taxation
- the policy to make mandatory for businesses to issue cash receipts
- the security system on personal information
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