[EDITORIALS]Switch pseudo fees to taxes

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[EDITORIALS]Switch pseudo fees to taxes

The Ministry of Planning and Budget's first-ever report on special assessments shows how irresponsibly the leading example of pseudo taxes has been managed over the years.

The fees were first introduced in 1961, and the number of taxable items and amount collected have grown steadily since. Politicians are vocal during election campaigns, saying they will do away with much of the burden, but none has ever made good on the vow.

The same can be said about the current administration. There were 92 assessment items in 1997, generating 4.7 trillion won ($3.9 billion) in revenue. But, over the past four years, the number of taxable items has increased to 101, with a 30 percent growth in revenues. Last year's increase alone was 2.1 trillion won, or 51.1 percent, over 2000. Excluding the amount collected from the next-generation communications operators selected last year, the increase at 11 percent was the largest in the past five years.

There can be justification for the collection of these fees, if the use of which and the people who pay them are specified. The resources are, no doubt, used in ways that are not entirely supported by the government budget, such as some public works, the environment and cultural endowments.

But the race for money among the ministries has created too many, and too costly fees. And the assessment and management are inefficient. Of the 101 different items in place last year, 32 were empty accounts that collected nothing over the previous two years. Wrongfully collected fees that were refunded following administrative claims amounted to 24.1 billion won. These demonstrate the lax management of the system; no doubt there would be many more problems if a closer look were taken.

The government put into effect a law on the operation of the special assessments. The law checks the introduction of new items and requires reporting on their management to the National Assembly. The task now is to examine each of the items to narrow the scope and to scrap elements that are no longer justifiable. The necessary items should be converted to taxes so that they would clearly be open to view.
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