Seoul Institute and Korea Local Tax Research Institute Host Forum on 'Impact of Fiscal Decentralization and Seoul's Response'... Seeking Solutions

Proposal for Enhancing Effectiveness of Intergovernmental Function Redistribution and Customized Fiscal Decentralization Based on Local Fiscal Conditions

[Asia Economy Reporter Lim Cheol-young] The Seoul Institute and the Korea Local Tax Research Institute will jointly hold a policy forum on the afternoon of the 8th at the 2nd Conference Room of the Seoul Metropolitan Council under the theme of "The Impact of Fiscal Decentralization and Seoul City's Response." This forum is an opportunity to review the direction of the government's ongoing second phase of fiscal decentralization and to seek policy solutions for effective implementation of fiscal decentralization.

The forum will proceed in the order of an opening address by Yoo Ki-young, Acting Director of the Seoul Institute, a welcome speech by Bae Jin-hwan, Director of the Korea Local Tax Research Institute, congratulatory remarks by Kim In-ho, Chairperson of the Seoul Metropolitan Council, congratulatory remarks by Chae In-mook, Chairperson of the Planning and Economy Committee of the Seoul Metropolitan Council, keynote presentations, and a comprehensive discussion.

The first presentation will be given by Han Jae-myung, Research Fellow at the Korea Local Tax Research Institute, on "Achievements and Challenges of the First Phase of Fiscal Decentralization Policy." Research Fellow Han emphasizes the major achievements of the first phase of fiscal decentralization, including the improvement in the ratio of national tax to local tax and securing the capacity of local governments to carry out their own projects through net increases in local finances.

On the other hand, he points out the absence of tax revenue expansion for basic local governments and the issue of resource compensation for the transfer of the Special Account for Balanced National Development as limitations of the first phase of fiscal decentralization. He suggests securing sufficient scale of local tax expansion and resource compensation for local governments experiencing revenue decline as future tasks for promoting fiscal decentralization.

The second keynote presentation will be delivered by Shin Ga-hee, Associate Research Fellow at the Seoul Institute, on the topic "Issues and Tasks of the Second Phase Fiscal Decentralization (Plan)." Associate Research Fellow Shin explains the issues under discussion by the Autonomy Decentralization Committee, the government, and the National Assembly regarding the second phase fiscal decentralization plan and presents future tasks for effective promotion of fiscal decentralization. She summarizes the core issues of the second phase fiscal decentralization plan as the debate over intergovernmental function reorganization (welfare big deal), methods of financial expansion for basic local governments, and inter-ministerial disagreements over the transfer of national subsidy projects to local governments.

Furthermore, as tasks for effective fiscal decentralization, she proposes a tailored fiscal decentralization approach that implements different fiscal management systems according to local financial conditions by promoting fiscal decentralization linked with the redistribution of government functions, preparing long-term tax revenue expansion, and discovering new local tax sources.

In the comprehensive discussion, chaired by Park Hoon, President of the Korean Local Tax Society, experts from various fields will participate in a discussion on "The Impact of Fiscal Decentralization and Seoul City's Response Measures."

Acting Director Yoo Ki-young said, "In this meaningful year marking the 30th anniversary of the revival of local autonomy, we have prepared a place to gather opinions from experts in various fields on fiscal decentralization, which is essential for the development of local autonomy," adding, "I hope that through today's forum, effective solutions for promoting the second phase of fiscal decentralization, which the government and ruling party are actively discussing, will be discussed."