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...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2016
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| 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 |
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okr-10986-23931 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
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 |
| spellingShingle |
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 Lee, Hyung Chul Can Electronic Tax Invoicing Improve Tax Compliance? : A Case Study of the Republic of Korea's Electronic Tax Invoicing for Value-Added Tax |
| geographic_facet |
East Asia and Pacific Korea, Republic of |
| relation |
Policy Research Working Paper;No. 7592 |
| description |
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. |
| format |
Working Paper |
| author |
Lee, Hyung Chul |
| author_facet |
Lee, Hyung Chul |
| author_sort |
Lee, Hyung Chul |
| title |
Can Electronic Tax Invoicing Improve Tax Compliance? : A Case Study of the Republic of Korea's Electronic Tax Invoicing for Value-Added Tax |
| title_short |
Can Electronic Tax Invoicing Improve Tax Compliance? : A Case Study of the Republic of Korea's Electronic Tax Invoicing for Value-Added Tax |
| title_full |
Can Electronic Tax Invoicing Improve Tax Compliance? : A Case Study of the Republic of Korea's Electronic Tax Invoicing for Value-Added Tax |
| title_fullStr |
Can Electronic Tax Invoicing Improve Tax Compliance? : A Case Study of the Republic of Korea's Electronic Tax Invoicing for Value-Added Tax |
| title_full_unstemmed |
Can Electronic Tax Invoicing Improve Tax Compliance? : A Case Study of the Republic of Korea's Electronic Tax Invoicing for Value-Added Tax |
| title_sort |
can electronic tax invoicing improve tax compliance? : a case study of the republic of korea's electronic tax invoicing for value-added tax |
| publisher |
World Bank, Washington, DC |
| publishDate |
2016 |
| url |
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 |
| _version_ |
1764455122350374912 |
| spelling |
okr-10986-239312021-04-23T14:04:18Z Can Electronic Tax Invoicing Improve Tax Compliance? : A Case Study of the Republic of Korea's Electronic Tax Invoicing for Value-Added Tax Lee, Hyung Chul 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 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. 2016-03-10T16:46:09Z 2016-03-10T16:46:09Z 2016-03 Working Paper 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 English en_US Policy Research Working Paper;No. 7592 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper East Asia and Pacific Korea, Republic of |