The Korea Local Administration Review

The acquisition tax is imposed on transactions of several objects such as realestate, automobile, aircraft, vessel, machine, membership for leisure, and so onby the various tax rates. The rates are different in taxed objects, in uses of anobject, and in acquired ways of real estate and vessel. Also heavy taxes are leviedin order to control over-concentration of the Capital region and to reduce lavishconsumption.This paper evaluates the complicated tax rate structure and derives some policyimplications. First of all, this paper reviews the theoretical rationale of theacquisition tax as well as arguments for and against the taxes. Based on thereview, the evaluation is done from various perspectives: benefit principle for localpublic services, efficiency for resource allocation, regional equity and stability oftax revenue, and administration and compliance costs as well as the principle fortax assignment between central and local governments. We suggest a reform toimpose an uniform tax rate of an object, irrespective of its uses or acquired ways,and also to abolish the heavy levies on over-concentration of the Capital region oron lavish consumption.
□ Keywords : aquisition tax rate structure, heavy levies, principles for localtaxation, tax simplification