The Korea Local Administration Review

Since medical services are highly valued, careful approach is needed to implement the local tax exemption policy for medical institutions. So this paper is trying to identify the problems of the current local tax reduction for the medical institutions and to suggest directions for local tax exemption for medical institutions to solve such problems.
The result of the analysis shows two problems of the current local tax reduction for medical institutions. One is that the sunset clause is not strictly applied. And another is that the standard of tax reduction is ambiguous. However there are enough hospitals to provide medical service to Koreans and many hospitals are established in areas where the supply of medical services is relatively insufficient. In addition, except for some medical institutions, most of the medical institutions are found to have local taxation ability. In view of this, there is a need to strictly apply the sunset provisions for local tax exemption for medical institutions. Nevertheless, since there is a difference in the level of publicity according to the type of medical institutions, the rate of exemption for medical institutions should be changed based on publicity.
This study examines the level of publicity by type of medical institution in order to set the tax cut direction for medical institutions. Based on this analysis, this paper suggests that the sunset clause be strictly applied, and the local tax exemption rate for the medical institutions should be applied differently based on the level of publicity in order to minimize the side effects after sunsetting the policy.

□ Keywords: Local Tax Reduction, Medical Institutions, Sunset Clause