Abstract

This study focuses on the improved grant for autonomous districts. The arbitration subsidy system which is kind of a grant is transferred from metropolitan cities to autonomous districts. In order to reduce the difference in the finance of the autonomous districts, their finance should be supported by the wide－area autonomous communities. The local tax revenue is directly related to the investment and development of local government. This study carried out review of literature, data analysis, empirical study. Empirical study used esimation of local tax revenue. Review of literature used draw a difference of prior research and present to contribution of the study. The local tax system reform arose in 2011. It leads to change the local tax revenue and the arbitration subsidy system. This change needs to review the arbitration subsidy system. This study will propose changes to the source of revenue and the proportion of arbitration in Incheon metropolitan city. It suggests that the source of revenue should be reduced from 50% to 45% and the proportion of arbitration should consider the arithmetical mean of the self reliance ratio of local finance. These suggestions will be able to improve the operation of the local finance and to narrow the financial gap of the autonomous districts. Particularly, local finance improved the Nam－gu, Bupyoung－gu, Gyeyang－gu.

Keywords

• arbitration subsidy system
• local tax system reform
• source of revenue
• proportion of arbitration

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