Excise Tax Funds from Golf Courses, Casinos May be Allocated to Local Governments

Funds from the special excise tax on golf courses, horse and bicycle racing tracks, casinos, and clubs may be reallocated to local governments to secure financial resources for local areas.

Lee Jong-kyu, director of the Tax and Customs Office at the Ministry of Finance and Economy, reported at a forum held at the National Assembly on Thursday by the financial research institute on the topic of “Courses and Tasks for the 2004 Tax Adjustments to Strengthen Growth Potential.” Through this topic, he said that the local governments would be able to expand their coffers if special excise tax funds were handed over to local governments.

The government and the Uri Party have decided to scrap special excise taxes on 24 items, but had announced that the taxes on golf courses and casinos would be retained on the previous day.

Director Lee added more, saying, “The local tax base on land and buildings should be materialized, and tax sources should be developed to correspond with the local area such as levying a local development tax on unwelcome facilities. Targets for taxation should also be expanded to enlarge an area’s revenue.” Related to measures to expand revenue, he said, “The current system will be changed into a ‘large tax source, low tax rate’ system to raise equity for the tax burden and to consolidate for an efficient employment of the tax reduction system.” Lawmakers Kim Jin-pyo and Lee Sang-min of the Uri Party, Pak Jae-wan of the Grand National Party, Sim Sang-jeong of the Democratic Labor Party, President Choe Yong-sun of the Korea Institute of Public Finance, and Kwak Tae-won, professor at Sogang University, participated as debaters at the forum.

Hoon Lee dreamland@donga.com