Preprint Article Version 1 This version is not peer-reviewed

Evaluation and Suggestions for Rational Energy Tax Policy in South Korea

Version 1 : Received: 4 March 2019 / Approved: 5 March 2019 / Online: 5 March 2019 (13:46:38 CET)

How to cite: Kim, K.S.; Yoon, S. Evaluation and Suggestions for Rational Energy Tax Policy in South Korea. Preprints 2019, 2019030066 (doi: 10.20944/preprints201903.0066.v1). Kim, K.S.; Yoon, S. Evaluation and Suggestions for Rational Energy Tax Policy in South Korea. Preprints 2019, 2019030066 (doi: 10.20944/preprints201903.0066.v1).

Abstract

Energy taxation is used globally as a means of energy policy. Energy tax plays an important role as a driving force for the conversion to environmentally friendly energy. The basic tax principles considered in the design of energy taxation increases the efficiency of policy instruments. The purpose of this study is to evaluate South Korea’s energy taxation based on tax principles, namely, equity, efficiency, simplicity, flexibility, and accountability and suggest directions for improvement. This study applied a methodology that provides policy implications, such as reviewing existing literature and comparing energy taxes. Results of this study show that South Korea’s energy taxation is negative in terms of equity, simplicity, and accountability. South Korea’s current energy tax is regressive to income classes and complex tax structures and it does not objectively measure the impact of energy taxation. However, energy taxation is evaluated positively in terms of efficiency and flexibility because it meets the greenhouse gas reduction policy and operates a flexible tax rate. The results of this analysis provide policy implications for reorganizing South Korea’s energy taxation.

Subject Areas

energy tax; tax principles; energy policy; equity; efficiency; simplicity; flexibility; accountability

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