Can Electronic Tax Invoicing Improve Tax Compliance? : A Case Study of the Republic of Korea's Electronic Tax Invoicing for Value-Added Tax

This paper reviews the Republic of Korea's experience with electronic tax invoices for its value-added tax regime from the perspectives of tax policy makers and administrators. The paper evaluates Korea's implementation of electronic tax invoicing and analyzes its effect on tax compliance through enhanced transparency of business transactions and taxpayer services. First implemented in 2011, mandatory electronic tax invoicing has been credited with lowering tax compliance costs and raising the transparency of business transactions. Effective policy design and implementation have contributed to the country's success with electronic tax invoicing. Measured in transaction value, the electronic tax invoice adoption rate reached 99.8 percent in the first year and rose to 99.9 percent by 2013, compared with 15 percent before electronic tax invoicing became mandatory. According to a survey of taxpayers and tax practitioners in Korea that was conducted as part of this research study, 69.4 percent of the respondents agreed or strongly agreed that mandatory electronic tax invoicing has contributed to curbing value-added tax evasion by raising transaction transparency, and 72.9 percent agreed or strongly agreed that it has improved taxpayer service by facilitating the convenience of tax filing or automating the issuance of invoices. The review of Korea's experiences gives credence to the contention that well-planned and well-executed compulsory electronic tax invoices can materially enhance tax compliance through significant institutional and perceptual changes in tax administration.

Bibliographic Details

Main Author:	Lee, Hyung Chul
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2016-03
Subjects:	TAX INCENTIVES, EQUIPMENT, CUSTOMER, MATERIALS, TELECOMMUNICATION, SEARCH, E-COMMERCE, RESOURCE PLANNING, COMMUNICATION NETWORK, PROGRESSIVE TAX, TAXPAYER COMPLIANCE, SALES TAX, STANDARD FORMAT, IMAGE, LEGAL SOLUTION, TAX COMPLIANCE, TRANSMISSION, FRAUDS, PRICE, CREDIT CARD, TAX LEGISLATION, AUTHENTICATIONS, CORPORATE INCOME TAX, EXTENSIBLE MARKUP LANGUAGE, ELECTRONIC MESSAGE, E-GOVERNMENT, COMPUTER, OPEN ACCESS, B2C E-COMMERCE, DATA, BUSINESS PARTNERS, COMMERCE, MESSAGE FORMATS, ELECTRONIC BUSINESS, CORPORATE INCOME TAXES, CERTIFICATION AUTHORITIES, TAX REGULATIONS, BUYERS, CONSUMPTION TAX, STANDARDIZATION, CREDIT CARD TRANSACTIONS, ELECTRONIC PAYMENTS, BUSINESS REGISTRATION, BUSINESS SERVICE, LEGAL FRAMEWORK, ELECTRONIC COMMERCE, DATA STORAGE, TAX OFFICES, IDENTIFICATION NUMBER, TRANSACTIONS, INTERNATIONAL STANDARDS, REGULATORY FRAMEWORKS, TAX INCENTIVE, BUSINESS OPERATIONS, LEGACY SYSTEM, PROCUREMENT, GENERAL POPULATION, G2B, SOFTWARE, DELIVERY OF GOODS, MOBILE PHONE, COMMERCIAL TRANSACTIONS, CREDIT CARD PURCHASES, INPUT TAX, PROTOCOLS, PRIVATE KEY, TAX EVASION, TAX RATES, TRADE FACILITATION, PRIVATE SECTOR, DATA INTEGRITY, ELECTRONIC DATA, BACKBONE, TAX DEDUCTION, RESULT, TAXATION, DIGITAL SIGNATURES, ICT, BUSINESS TRANSACTION, BUSINESS, BUSINESSES, REAL-TIME ACCESS, ADDED TAXES, PERFORMANCE, PUBLIC ADMINISTRATION, TAXPAYERS, E-MONEY, TAX ADMINISTRATION, SOFTWARE SOLUTION, INSTITUTION, FINANCIAL SUPPORT, COMMUNICATION, NEW TECHNOLOGY, TAX RETURN, COMMUNICATION TECHNOLOGY, APPLICATION SERVICE PROVIDERS, AUTHENTICATION, OUTSOURCING, SERVER, TELEPHONE BANKING, REGULATORY FRAMEWORK, DATA PROCESSING, CREDIT CARDS, ELECTRONIC DOCUMENT, CERTIFICATION AUTHORITY, ADDED TAX, ELECTRONIC FORMATS, CERTIFICATE, E-PAYMENT, DATA CENTER, INFORMATION SYSTEM, TAX COMPLIANCE COSTS, BUYER, CAPABILITY, BUSINESS TRANSACTIONS, INFORMATION, ELECTRONIC SIGNATURE, TAX COLLECTION, EXCLUSION, APPLICATION SERVICE PROVIDER, BUSINESS TO CONSUMER, TAX, VERIFICATION, INCOME TAX, DATA PROCESSING SYSTEMS, INSTITUTIONS, PHONE NUMBER, BUSINESS TO BUSINESS, INSTANT ACCESS, VALUE ADDED TAX, CONTROL SYSTEM, AUTOMATION, SERVICE PROVIDER, TAX BASE, PAYMENT METHODS, TAX REVENUES, DATABASES, TELEPHONE, ACCESS TO INFORMATION, TAXES, USERS, PHONE, TECHNOLOGY, INCOME TAXES, POINT OF SALE, TRANSACTION, RELIABILITY, PILOT TESTING, TAX CREDIT, FRAUD, TAX RATE, DIGITAL INFORMATION, RESULTS, TRANSFER PROTOCOLS, DIGITAL SIGNATURE, POINT OF SALES, MARKUP LANGUAGE, BARCODE, ACCESS CONTROLS, ELECTRONIC FORM, ELECTRONIC DOCUMENTS, TAX LIABILITY, MICRO BUSINESSES, INTERNATIONAL TELECOMMUNICATION, SALES TRANSACTIONS, WEB PORTAL, TAX AVOIDANCE, TAX REVENUE, ADMINISTRATION, ELECTRONIC SIGNATURES, PERSONAL INCOME TAX, TAX ACCOUNTING, TAX CREDITS, MARKET SHARE, SECURITY, B2C, B2B, NETWORK, TAX SYSTEM, SIGNATURE CERTIFICATION, GOVERNMENT SERVICE, IMPLEMENTATION PROCESS, CERTIFICATES, LEVIES, TAX POLICY, TAX REFORM, CUSTOMERS, LEGACY SYSTEMS, ELECTRONIC FORMAT, ENTERPRISE RESOURCE PLANNING, TECHNOLOGIES, MULTIMEDIA, TAX RETURNS, TARGET, FINANCIAL OPERATIONS, SERVICE PROVIDERS,
Online Access:	http://documents.worldbank.org/curated/en/2016/03/26031845/can-electronic-tax-invoicing-improve-tax-compliance-case-study-republic-koreas-electronic-tax-invoicing-value-added-tax http://hdl.handle.net/10986/23931
Tags:	Add Tag No Tags, Be the first to tag this record!