Problems of SME Special Tax Reduction System and Solutions －On the Issue of Equity－
Asian Tax Journal Vol. 17 No. 4 (2016), pp. 33-62
Abstract
This paper presents a study of SME Special Tax Reduction System, one of tax support measures. Problems, both in the system itself and in its operation, are researched along with solutions in order to seek ways to improve it. It is thought that this is the first research in Korea which studies operational issues. Corporate taxation on standard firms and SMEs, tax reduction and tax deduction are studied in tandem. In particular, the proportion of total corporate tax paid by all SMEs which is offset by SME Special Tax Reduction has been analysed in comparison to other tax reductions and tax deductions for SMEs. In particular, of operational issues, the question of equity in tax support has been studies has been framed into the following issues：amendment of application standards for SME under Tax Reduction and Exemption Control Act；unfairness in comparison to reduction and deduction for non－SMEs；disparity with regards to other reduction and deduction measures for SMEs；and inequity for SMEs in the capital. For each issue, solutions are proposed. The author wishes that the current line of research will continue to bring about individual assessment, analysis and statistical research on tax support systems under Tax Reduction and Exemption Control Act. This paper will be analyze a study of SME Special Tax Reduction System, and also in its pursuit of fairness presents improvement plan.
Keywords
- Special Tax Reduction of SMEs
- Tax Reduction and Exemption
- Tax Support System
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