The Korea Local Administration Review

In order for our local autonomy to jump to mature stage, it is necessary for all the components of local autonomy system-central government, local governments(and its heads), local assembly(and its members), local residents-to cooperate, check and complement each other. In this paper, the following schemes are suggested. To increase own revenues, appropriate expansion of both local tax and non-tax revenues are needed. In the case of local tax, introduction of new tax, putting tax exemption and deduction in good order, transfer of national tax to local tax, securing missing tax bases are suggested. And to enhance fiscal soundness of local governments, the roles of all four components of local autonomy system are critically presented. It is necessary for central government to improve various local fiscal management tools in order to have practical effects. In the case of central government, it is essential to improve investment-loan screen system, local bond issue system, incentive and penalty system of local share tax, and local finance analysis and diagnosis system, and so on. In the case of local governments(and its heads), it is necessary to promote expertise and fairness in investment-loan screen system, recognize project-related laws and ordinances, and maintain sound but tense relationship with local assembly.
 
□ Keywords: fiscal soundness, Local Finance Management System, own revenues, roles of components