• Title, Summary, Keyword: Tax Subsidies

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Estimation of Environmentally-Unfriendly Government Subsidies in the Water Sector for Green Tax Reform (환경친화적 조세개편을 위한 용수부문 정부보조금 규모 분석)

  • Min, Dong-Ki;Lho, Sang-Whan
    • Environmental and Resource Economics Review
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    • v.10 no.2
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    • pp.235-257
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    • 2001
  • As in other Asian countries, the Korean government provides direct subsidies to endeavors that are potentially harmful to the environment. The water sector is one of the main recipients of these subsidies. The total amount of estimated direct fiscal subsidies equals 2.200 trillion won; however, the comprehensive cost of the subsidies is estimated to be much greater because environmental and social costs were not considered in the initial calculation. Most of the fiscal direct subsidies in the water sector are subsidized to urban water areas. The percentage of fiscal direct subsidies in the urban water sector to the total fiscal direct subsidies is 79.68%, while the percentage of fiscal direct subsidies in the industrial water sector is only 4.92%. Since the ratio of fiscal direct subsidies in the industrial water sector is quite small, the negative impact of removing fiscal direct subsidies for the industrial sector may be trivial. If the Korean government cuts dowm the VAT or income tax rate while reducing several types of subsidies, it will be able to achieve a double dividend effect both on the economy and the environment.

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The Appropriatness of Government Support of Shipping Industry ; A General Equilibrium Approach (해운산업에 대한 정부지원의 타당성 검토)

  • 정봉민
    • Journal of Korean Society of Transportation
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    • v.8 no.2
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    • pp.27-41
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    • 1990
  • In this study the economic impacts of government support of shipping industry in the labor rich country are appraised in a general equilibrium model. Shipping industry subsidies (which are supposed to be supplied by lump-sum tax) will decrease disposable income by shifting productive resources from traded goods to the comparatively disadvantageous transport sector, and at the same time reduce the implicit tariff effect by lowering transport costs. The net effect of shipping industry subsidies is to increase social welfare because the latter positive effect of shipping industry subsidies is to increase social welfare because the latter positive effect dominates the former negative effect. Such an increase in social welfare can never be expected from competitive traded goods industry subsidies in the case of which social welfare will actually decrease because of inefficient resource allocation resulting from the subsidies. In addition it is worth noting that the subsidies on the most capital intensive shipping industry will rectify unevenness in income distribution by raising relative price of labor contrary to subsidies on capital intensive traded goods.

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Comparative Analysis on Fisheries Subsidies between Major Countries and Korea (주요 수산국과 한국간의 수산보조금 비교 분석)

  • 이광남
    • The Journal of Fisheries Business Administration
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    • v.34 no.2
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    • pp.27-52
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    • 2003
  • The object of this paper is to review the fisheries subsidies of the major FFG(Fish Friends Group) which argue the elimination and the phasing-out, to compare with Korea's subsidies category and provide the basic information for planning of fisheries subsidies policy and the negotiation strategy in the future. The result from the comparative analysis of the subsidies between the major FFG showed that WWF(World Wildlife Fund) fisheries subsidies categories, with the exception of Marketing and Price Support Program which is similar to Korea in terms of the supporting type and methods, differ from those of Korea. Also, The unique type of WWF Fisheries Subsidies, which is beyond Korea's subsidies, are Direct Payment for Fishermen and Fishery Wokers, Capital & Infrastructure Support, Fishery Management and Protection, etc. In case of capital support and fisheries fuel, the payment method or other institutional backgrounds is somewhat different from each nation. On the base of this analysis, this paper is suggesting the direction of the Korea's Fisheries subsidies policy as follows ; First, developing new policy methods and supporting ways such as Direct Payment for Fisherman is needed. Second, Converting fisheries subsidies category expected to be classified to Red Amber into another type of non-negative subsidies should be carried out, demonstrating that these kinds of subsidies give no negative effect to the environment and the trade, Third, Reviewing the categorize system of Korea's subsidies and revising it according to international trends is necessary as well. In respect to WTO/DDA, the watchful analysis of Korea's fisheries program must be preceding in ahead of making the negotiation strategy. And Korea firstly need to stress the fact that, while the major FFG can directly pay for fisheries section, other nations have no choice but supporting in preferential tax or loan manner. Using this kind of strategy, it is may enlarge the negotiating power in the WTO/DDA to reflect fully Korea's position.

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An Analysis of Relationship between R&D Policies and Firm R&D Expenditures: Focused on R&D Subsidies and Tax Incentives (R&D 지원제도와 기업 R&D 지출액간 관계 분석: 정부 R&D 보조금과 세제혜택을 중심으로)

  • Suh Kyoo-Won;Lee Chang-Yang
    • Journal of Technology Innovation
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    • v.14 no.1
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    • pp.101-118
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    • 2006
  • The relationship between R&D Polices(R&D subsidy, tax incentives) and firm R&D expenditures is analyzed through firm's profit maximization function. As a result, the relationship between R&D policies and fmn R&D expenditures is determined by the relationship between firm R&D expenditures and market price. In case of major innovation which cause the fall of market price, the elasticity R&D subsidy and firm R&D expenditures is negative(substitution). In case of minor innovation which cause the rise of market price, the elasticity R&D subsidy and firm R&D expenditures is positive(complement). Tax incentives is bring about the increase of firm R&D expenditures. R&D subsidy and tax incentives are substitutively influenced at firm R&D expenditures.

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Reforming Environmentally-Harmful Subsidies in the Energy and Electricity Sectors in Korea (우리나라 에너지·전력 부문 보조금의 환경친화적 개편 효과 분석 : 연산일반균형분석을 중심으로)

  • Kim, Seung-Rae;Kang, Man-Ok
    • Environmental and Resource Economics Review
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    • v.20 no.4
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    • pp.827-858
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    • 2011
  • In Korea, various environmentally harmful subsidies are granted in agriculture, fishery, energy, electricity, transportation, steel and shipbuilding industry. Examples include tax-exempt fuel for agriculture & fishery, VAT- exemption for briquette & anthracite, temporary subsidy for fuel, production stabilizing subsidy for coal mining, subsidy for briquette. Korea's yearly total subsidy in energy area is about 5,291 billion won, among them is 4,870 billion won. To reduce air pollutants and to mitigate climate change, Korea has to review the phase-out of environmentally harmful subsidies and the phase-in of environment-friendly subsidy. The reduction or removal of environmentally harmful subsidies will enhance economic efficiency and bring about environmental benefits. Economic efficiency means less use of inputs, which reduces environmental cost and improves social benefits. This paper applies the Shoven and Whalley's model to the Korean economy and analyzes the general equilibrium incidence effects of reforming environmentally harmful subsidies in the energy and electricity in Korea. We consider several counterfactual scenarios in which current environmentally harmful subsidies are reduced or abolished, compare them with the reference case in the economy, and evaluated the change in efficiency costs and distributional incidence of tax reforms related to subsidies.

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A Study on the Effectiveness of the Oil Supply Policy for Korean Fisheries Industry in the Era of Subsidy Prohibition (수산보조금 금지 시대의 유류 공급 정책에 대한 연구)

  • 강연실
    • The Journal of Fisheries Business Administration
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    • v.33 no.1
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    • pp.43-68
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    • 2002
  • In the fisheries industry, the cost of oil Is the greatest factor, contributing 25% 40% of the cost of production. In order to support fisheries, the government has supplied large amounts of money for oil to the fisheries industry. However, the elimination and restriction against the subsidy of fisheries has been actively discussed throughout international organizations Including the WTO. The purpose of this thesis is to study the existing issue of subsidies on the fisheries Industry, which is currently disputed in international organizations, and predict a future policy about the oil supply that considers the most important factors on fisheries. In chapter 2, the paper begins by outlining the tendencies of discussion in relation to the subsidy on fisheries among international organizations, and categorizes them on the basis of their types. Chapter 3 defines the current conditions and characteristics of the Korean subsidy on fisheries and analyzes which portions of the subsidy on fisheries should be eliminated first when it is prohibited. In chapter 4, procedures and problems for producing tax-free oil are discussed, because tax-free oil has a higher possibility of being ruled out. Chapter 5 proposes a reasonable plan concerning oil supply policies for maintenance or enrichment of the fishing industries, post the elimination of subsidies. Conclusions were drawn in eight areas as a result of this study: 1) securing the large storage of oil, 2) extending customers of oil to include non-fishermen, 3) coordinating the segmentation of marketing area, 4) diversification of the sales goods, 5) producing oil sales experts, 6) developing original brands, 7) expanding the purchasing area to buy oil in the international market, and 8) operating funds to stabilize oil price. It would not be appropriate to wait until international organizations decide to ban the subsidy of fisheries. Corresponding plans ( such as securing the large storage of oil) tend to be large scale and long-term projects because they take a number of years, from designing the oil storage tank to selecting the proper region and initiating the construction. Therefore, it is strongly suggested that any extensive and time consuming projects including preparation for the tax-free oil should be completed in new actions before the ban by the international organizations.

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Welfare Effects of the Tax Reforms in Two Vertically-Related Oligopolies with Environmental Externality

  • Hong, In-Kee
    • Journal of Environmental Policy
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    • v.7 no.3
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    • pp.1-40
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    • 2008
  • In this paper, I examine the welfare effects of various revenue-neutral tax reforms in the case of two vertically-related oligopolies(downstream and upstream), where the upstream industry is polluting. I show analytically when and how government can improve welfare by initiating various tax reforms, regardless of either the feasibility of a lump sum transfer or the availability of a tax on pollution. The profit wedge that is the difference between the unit price and the unit cost and the marginal environmental damages(MED) becomes important to decidethe direction of a tax reform and is crucial to determine the direction of welfare-improving tax-subsidy schemes. I also show that a tax on pollution(Pigouvian tax) is superior to a tax on intermediate good even in the case of vertically-related oligopolies, because the former always brings in positive welfare effect from the upstream firms' input substitutability, which a tax on intermediate good cannot provide. Some policy implications for 'reducing environmentally-harmful subsidies' are also discussed.

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Fisheries Countermeasures Against Rising Oil Prices (수산업의 고유가 대응 정책 방향)

  • Park, Seong-Kwae
    • Journal of Fisheries and Marine Sciences Education
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    • v.20 no.3
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    • pp.442-451
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    • 2008
  • The purpose of this study is to analyze the impacts of the rapid rise in oil prices on fisheries economy. Even though fishery oils are tax exemption items, such increase in oil prices put a great amount of pressure on Korean fishing operations. Because basically the recent oil shock is externally given, Korean fisheries themselves have little capacity to cope with the disruption of economic environments. The research results turned out that Korean fisheries are extremely vulnerable(or fragile) to external shocks. In this regard, government support issues of oil costs are in the center of debate. It is widely recognized that direct/indirect government financial supports or subsidies would result in economic inefficiency in expense of equity. However, there are second best theories which may justify government intervention into the markets. This second best theory is translated into the constitutional law that instructs the government to protect and promote the primary industries including fisheries, agriculture, and midium/small-scale enterprises. It is apparent that the constitutional law would provide the government with a variety of policy instruments such as more active buy-back programs, tax exemptions and technological development to deal with fisheries economic hardship due to the external pressure such as high oil prices and international fishery orders.

An Empirical Study on the Impact of the Policy Lags and Policy Direction in the FDI inflow (외국인직접투자 유치정책의 정책시차 및 정책방향에 관한 연구)

  • Ji, Young-Han
    • International Commerce and Information Review
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    • v.16 no.3
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    • pp.183-202
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    • 2014
  • The time-lag effect of the policy was analyzed focusing on the financial subsidies which are the incentive for attracting the foreign direct investment for the Korean industries from 2007 to 2012. The analysis results show that Korea's policy for attracting the foreign direct investment has the time leg of 2 or 3 years after the implementation of the policy. If the goal is to attract the foreign investment or introduce the advanced industrial technologies, the tax reduction system would be better. However, if the goal is to get the short term effects such as job creation or regional development, the direct subsidy or the financial support (financing) or the lexicographic characteristics of the policy for foreign investment would be more effective for attracting the foreign investment. Accordingly, the Korea's policy for attracting the foreign direct investment should be focused on the realistic policies such as direct subsidies or financial support (financing) rather than the tax reduction system.

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Effect of Direct and Indirect Subsidies on Profitability in General Hospitals (종합병원의 직·간접보조금이 수익성에 미치는 영향)

  • Park, Ki-Hyeok;Ha, Au-Hyun
    • Journal of Convergence for Information Technology
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    • v.10 no.9
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    • pp.206-214
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    • 2020
  • This study analyzed the impact of direct and indirect subsidies on profitability in general hospitals in Korea. The data were collected from medical institution accounting information disclosure system of 270 general hospitals from 2016 to 2018. The analysis index used the ratio of net profit to business revenue for profitability, and Subsidies index the ratio of subsidies to business revenue(state subsidies for facility investment purposes, Fund related to essential business, research revenue and contribution revenue). According to the study, the ratio of state subsidies, which are direct subsidies, was very high at 57.30 percent for public institution hospitals. ratio of Fund related to essential business, which is a tax reduction effect with indirect subsidies, had the highest at 6.69 percent for Private University Hospitals. which are Indirect subsidies for deficit or operational assistance, research revenue ratio had the highest 2.8 percent for National University Hospitals, contribution revenue ratio had the highest 36.4 percent for public institutions. As a result of looking at the impact of subsidies on profitability, Nation University Hospitals had the lower the ratio of Fund related to essential business and the ratio of research revenue, the higher the net profit ratio of Business revenue. Medical Corporation Hospitals and Foundation Hospitals had the higher the ratio of Fund related to essential business to business revenues, the higher the net profit ratio of business revenue. These results mean that profitability may fluctuate depending on the utilization of funds related to essential business.