[Outlook]Insider tax reform

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[Outlook]Insider tax reform

The National Tax Service receives more criticism and causes more trouble than any other government agency in Korea.
The tax agency is under the Ministry of Finance and Economy but it is more powerful than the ministry. It employs a huge number of people who feel a strong common bond from working there.
Because of these traits, the tax office is known among people more as a powerful institution than one that serves the people.
Thus, former administrations made sure that they employed those who were close to them or in good relations with them as chairmen of the National Tax Service. Previous administrations filled high positions at the tax office with their people as well.
As a result, a soldier became chairman of the tax agency even though his wages were the only thing he ever had to calculate. In another instance, a person who had committed corruption became the head taxman, in charge of making the staff carry out fair taxation.
These former chairmen were employed because of their political backgrounds but all of them pursued reforms in taxation.
The National Tax Service is a conservative bureaucratic organization and workers do as they are told by their bosses. So the workers always follow orders, or at least pretend to do so.
As a result, former chairmen have always achieved their reform goals.
In the agency’s history, a person far from reforms transformed himself into a chairman who achieved reforms that were better than any other. Another person who had no administrative skills was described as the most skillful administrator.
However, tax reforms are not finished yet. Even though former chairmen claim that they implemented reforms, the same old problems keep popping up.
In this sense, the measure to reform taxation that the National Tax Office has released recently is worth paying attention to.
Unlike in the past, the recent measure addresses problems at the National Tax Service that it has had for a long time but has never discussed. When an organization grows and its workers accumulate experience, they tend to have more problems to think about.
Workers of the organization know the content of the problems and the best ways to resolve them. They are better informed than anyone outside the organization.
But in most organizations, workers hide such problems and do not talk about ways to solve them because they do not want to reveal their own flaws or they are not used to changes. Thus, reforms in government agencies have to be pushed from the outside.
However, such outside forces for reform have long lost their power over the National Tax Service. The agency has carried out reforms so often that it seems things that needed to be changed have changed.
Now is the time to pursue reforms based on the agency’s thinking and experience, instead of on outside forces.
The recent measure reflects voices inside the tax office. Examples include a person from a certain area not being employed in that area’s local office.
In another reform, the right to decide personnel affairs for mid-level staff and down is to go from being held by the chairman of the National Tax Service to heads of local offices. Also, tax investigations are to be held in the form of discussions instead of reports.
The office plans to have an open competition for posts that many people want, introduce incentive measures for top officials and end a seniority system.
Although such measures have pros and cons, they are generally regarded as an inevitable trend of our time.
It will take a long time to implement these measures. The National Tax Service needs to think more seriously about the problems that its workers have pointed out and listen to their ideas on how to solve them. A saying goes that a crisis is a chance to change for the better. Now is a chance for the National Tax Service to listen to its inner voice and to implement reforms from inside.
At the same time, morale must be boosted again because a series of reform measures have dampened the mood inside the office.
The workers in the agency need higher salaries and better benefits because their current wages are not high. This makes them susceptible to temptations such as bribes.
An incentive system must be enhanced to hire talented people and new taxation methods must be developed.
The tax law is vague, making it subject to arbitrary interpretation. This is the main reason for corruption in taxation. The law must be revised so that it becomes clear and understandable.

*The National Tax Service needs to think more seriously about the problems that its workers have pointed out and listen to their ideas on how to solve them.

by Yim Joo-young
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