농업분야 부가가치세 제도 발전 방향과 과제

Abstract

우리나라는 국내에서 생산되는 재화와 용역에 부가가치세를 10% 단일세율로 부과한다. 다만 기초생활필수품 구입에 따른 경제적 부담 완화를 목적으로 농산물은 부가가치세 면세이다. 그 결과 가구별 소득 역진성 완화, 농업인의 납세협력비용 감소 등의 긍정적 효과와 더불어 누적효과와 환수효과, 면세 판정을 둘러싼 행정비용 등의 문제점도 함께 가진다.

이 연구는 우리나라 농업 관련 부가가치세제에 내포된 이 같은 한계점이 농산물 부가가치세 면세 제도에서 기인한다는 문제의식에서 출발한다. 이에 농업 관련 부가가치세제의 성과와 한계에 대하여 고찰하고 농업 관련 부가가치세제의 발전 방향과 과제를 제시하고자 하였다.

구체적으로 참고문헌과 전문가 조사를 실시하여 농업 관련 부가가치세제 현황, 농업관련 조세특례제도 운영현황을 살펴보고 성과와 문제점을 검토하였다. 그리고 위탁연구를 통해 확률적 균형대체모형을 이용하여 농산물 부가가치세 체계 변화 시, 농산물 및 생산요소 시장에 미치는 파급효과를 분석하였다. 해당분석에서 도출된 결과를 활용하여 농산물 과세 전환으로 인한 소비자 세부담 변화와 납세 대상 농업인의 특성 및 납부세액을 추정하였다. 끝으로 분석 결과에 대한 종합적인 판단을 내리고 농업 관련 부가가치세제의 발전방향을 제시하였다.

Purpose of Research This report aims to examine the performance and the limits of the value-added tax (VAT) system which applies to agriculture and agribusiness, including zero rate which applies to agricultural inputs, tax deduction related to machinery or materials for agriculture and fisheries and the deductions of fictitious input tax amounts for agricultural products with a focus on the VAT exemption for unprocessed agricultural products. The evaluation on the VAT system associated with agriculture is expected to provide policy suggestions which can lead to an increase in efficiency of the VAT system in the long run. The VAT exemption for unprocessed agricultural products has merits such as easing household income regressivity and cutting farmers' tax compilation costs, but also has demerits such as cascade effect, catching-up effect, and administrative costs due to vague criteria for tax exemption. The zero rate VAT and VAT exemption applied to machinery or materials for agriculture and fisheries contribute to reducing farmers' production costs, but also have limits in that they make market distortion which leads to the excessive use of inputs that can be environmental pollution source, they cost a lot in administration, and it is needed to regularly review whether to extend this sunset law. Deductions of fictitious input tax amounts for agricultural products support small business owners, but have problems including controversy over the adequacy and limit of the deduction rate of fictitious input tax amounts, discrimination by type of business, and reverse discrimination against domestic products. Since the introduction of the VAT system, consumers' food consumption trend has been changed. For example, the consumption of processed foods and dining out have increased while the proportion of food in household expenditure has decreased. Nevertheless, there have not been in-depth studies on the overall direction of the VAT system related to agriculture, including the tax exemption system, in accordance with the changed consumption environment. This study is conducted to assess the performance of the VAT system related to agriculture under the changing consumption trend and to examine tasks for higher efficiency of the VAT system.

VAT System Related to Agriculture: Performance, Limits, and Alternatives The benefits of the current VAT system related to agriculture include the tax exemption system for agricultural products which contributes to the redistribution of household income, compilation cost cuts due to exemption from making VAT returns, and a reduction in farmers' production costs. However, the limits of the system decrease the benefits considerably, and the socio-economic costs for maintaining the current system are high. For example, there are cases that the effect of tax exemption for agricultural products is not delivered to consumers due to cascade effect and catching-up effect. Also, producers of agricultural machinery or materials, as well as farmers, obtain welfare increase because tax exemption reduces the price of agricultural inputs which results in an increase in input consumption. Although the current tax system has achieved the policy goals, its socio-economic costs are not negligible. Therefore, we should consider a better alternative if it exists. The following are two alternatives. First, taxing agricultural products can be considered. Second, it is possible to maintain the current system and solve its problems through partial amendment or supplementary measures. Taxing agricultural products is radical but provides the groundwork for fundamentally solving the above-mentioned problems to a considerable degree. First, the problems of the tax exemption for unprocessed agricultural products are solved. Also, as farmers should report VAT collected and farmers' tax invoices are issued, it is possible to naturally abolish special tax treatment related to agricultural inputs and deductions of fictitious input tax amounts. This can resolve the problems of the existing VAT system associated with forward and backward linkages with agriculture to a considerable extent. Nonetheless, while solving the existing problems, taxing agricultural products may cause side effects such as a decrease in the consumption of the products, the consequent decline in farm households' agricultural income, and an increase in the tax burden in the low-income bracket. If these side effects are bigger than the benefits of taxing agricultural products, it will be more reasonable to maintain the current system and prepare supplementary measures. The second method cannot solve the problems of the current system fundamentally, but does not cause social confusion due to the system change and conflicts between agricultural producers and consumers, that is, economic agents. Therefore, the second method can be reviewed as an alternative.

Effect of Imposing VAT on Agricultural Products We conducted a quantitative analysis of the ripple effect of the first alternative, taxing agricultural products. We analyzed the impact of imposing VAT on agricultural products on the consumption and prices of the products by using a stochastic equilibrium displacement model. The result shows that imposing a tax rate of 10% on agricultural products decreases rice consumption by 2.01% and increases consumer prices by 7.61% and sales by 5.45%. In the market for livestock products such as beef, pork, and broilers, the consumption is estimated to decline by 3.81%, 3.88%, and 3.51% respectively. Like this, taxing agricultural products is expected to decrease the consumption of the products and agricultural income by raising their prices. Moreover, taxing agricultural products increases consumers' tax burden. Imposing a tax rate of 10% on the products increases the total urban households' tax burden by 1.37 times the case of tax exemption. Particularly, the tax burden of low-income households will increase more than that of high-income households. According to the estimation result, the tax burden rate of first-decile households becomes 1.71 times the case of tax exemption, while that of 10th-decile households grows 1.22 times. Also, single or two-member elderly households are expected to experience an increase in the tax burden rate higher than the average. These results show that imposing VAT on agricultural products worsens household regressivity. Last, if agricultural products are taxed without preparation in terms of the environment for tax payment, compilation costs which farmers should pay are expected to be considerable. In case of taxing the products, farm households that have a duty to make their VAT returns are estimated to be approximately 26% of total households. The age of farm managers of these households is judged to be younger than that of farm households exempted from making VAT returns, and the farming size of the former larger than that of the latter. Nevertheless, a big chaos is expected if agricultural products are taxed without establishing tax payment infrastructure in rural areas where dealing with tax affairs and keeping account books are not common. Considerable costs occur given compilation costs and the psychological burden of dealing with unaccustomed tax affairs.

Policy Suggestions for the VAT System Related to Agriculture The current VAT system related to agriculture is evaluated to have achieved its purpose. Nonetheless, the considerable socio-economic costs of maintaining the system make it inefficient. Therefore, it is necessary to seek an alternative to support farmers and consumers with less costs. In terms of efficient support, direct support through government expenditure can be an alternative, rather than the method of tax expenditure. For instance, it is possible to expand direct support for low-income households' food consumption instead of changing tax exemption for agricultural products to taxation on them. Also, if additional tax revenues from taxing agricultural products are included in the Agriculture and Fisheries Structure Adjustment Special Account and used for direct support projects to enhance farmers' income, it becomes possible to more support groups that actually need government support. Thus, it is needed to positively consider taxing agricultural products that have been tax-free as an alternative to the current system. Taxing the products can also be considered in terms of the development of agriculture and agricultural policy. Most of all, taxing agricultural products can be considered in terms of the development of agriculture and agricultural policy. For the future-oriented development of the agriculture sector, it is necessary to include the sector in the network of the VAT system. Imposing VAT on agricultural products can be positively reviewed in terms of strengthening agricultural competitiveness by farm households' keeping account books and improving agricultural management techniques. If farm households keep account books and report their sales, it is possible to implement farmer support policies based on official sales records. In addition, imposing VAT on agricultural products can contribute to improving the transparency of transactions in agricultural machinery, materials, and products. However, as analyzed above, taxing agricultural products makes farmers and consumers pay socio-economic costs due to the decrease in the consumption of the products, the increase in farmers' compilation costs, the rise in consumers' tax burden, and the worsening of income redistribution. While the benefits of taxing the products are invisible and gradual over a long period of time, the costs can be visible and immediate. Also, the agricultural sector mainly receives the benefits of the system change, and consumers can indirectly experience the effects only through safe and healthy food due to the advancement of agriculture. Therefore, taxing agricultural products can cause conflicts concerning interests between consumers and farmers. Thus, it is required to carefully review taxing the products. Although its need is recognized for the development of agriculture and agricultural policy, it is necessary to consider the consequent socio-economic costs, conflicts between economic agents, and social chaos due to the system change. It is desirable to review taxing agricultural products only when the overall environment is created, including forming a national consensus and building the infrastructure for tax payment. Further, imposing VAT on agricultural products should be linked with discussion on reforming the overall tax exemption system. Because various goods and services in addition to agricultural products are tax-free, it can cause another inefficiency to exclude discussion on taxing the goods and services and only discuss taxing agricultural products. Imposing VAT on agricultural products should be reviewed by considering the order of priority between taxing other tax-free goods or services and taxing agricultural products in discussion on the overall reform of the tax exemption system. In conclusion, it is significant to identify the problems of the VAT system related to agriculture and review the need for its improvement. Taxing agricultural products should be considered from a long-term perspective as a way to solve the problems. In the short term, it is desirable to focus on setting up plans to expand support for farmers' tax payment and plans to solve the problems concerning the tax system. Concretely, it is needed to improve the tax support effect by strengthening the promotion of and education on special taxation, and to draw implications for Korea by researching overseas support systems for farmers' tax payment. Last, it is required to contribute to farmers' efficient farm management and prepare for discussion on a future tax system by examining ways to establish a system for supporting farmers' tax payment.

Researchers: Lim Soyeong, Kim Yunjin, Kang Sujin Research period: 2018. 1. ~ 2018. 10. E-mail address: sylim@krei.re.kr