The Korea Local Administration Review

This study aims to analyze whether the Local Resource and Facility Tax is disbursed for the purpose tax of its original expenditure goals. To this end, this study investigated the regulations related to the Local Resource and Facility Tax, looked at the problems of Local Resource and Facility Tax and suggested improvement measures solve these problems. According to the Local Tax Law, the Local Resource and Facility Tax consists of three parts: specific resources, specific facilities, fire facilities as one of the resources for the fire department special account. Among them, the part of the fire facilities is used as a financial resource for the special fire department account. And this means it is disbursed in accordance with the purpose tax. But the other two parts are not. Clause 9 (2) in the Local Tax Law requires the establishment of special accounts to utilize the earmarked tax of local governments. According to the local governments’ ordinances, only Seoul, Daegu, Incheon, Gwangju, and Daejeon do not follow suit. Besides, even if an ordinance was enacted to use the Local Resource and Facility Tax for specific resources and facilities as the special account’s financial resources, some cities and provinces found that the user did not meet the Local Resource and Facility Tax. In this study, the revision of the Local Finance Act and the establishment of a new regional resource facility tax for specific resources and specific facilities (tentative name) were proposed to improve them.