by relieving taxpayers of the duty to submit aggregate summary lists of invoices and store invoice records for five years. The tax authorities also introduced KRW200 in sunset tax credit for ETI issuance to compensate for the cost of the Internet or outsourcing ETI issuing. The NTS also took various measures to facilitate e- invoicing. It launched _e-sero_ , an ETI-issuing website, and a telephone automatic response system to help small companies and individual businesses lacking their own IT systems issue ETIs for free.

Such concerted efforts ultimately paved the way for the successful implementation of compulsory ETI. The ETI adoption rate in terms of transaction value reached 99.8 percent during the first year of introduction in 2011 and 99.9 percent by 2013, which compares to 15 percent before the compulsory ETI. According to estimates by the NTS and Korea Institute of Public Finance, ETI cut taxpayers’ compliance cost by KRW978 billion (approximately USD890 million) after incurring KRW263 billion (approximately USD240 million) for initial transition costs including the purchase of new IT systems and employee training. Investment cost to the NTS for various ETI support systems and their operational cost from 2009 to 2014 was estimated at approximately KRW27 billion. Therefore, ETI has helped taxpayers and the tax authority achieve substantial cost savings since its introduction.

A survey of tax practitioners and employees of business taxpayers also showed that compulsory ETI had a significant effect on tax compliance, the transparency of business transactions, and taxpayer service. 69.4 percent of the respondents agreed or strongly agreed that tax evasion would decline as a result of greater transaction transparency brought about by ETI. 72.9 percent of the respondents agreed that taxpayer service improved after the introduction of ETI as a result of the convenience of e-invoicing and e-tax filing. Although 52.4 percent of the respondents agreed that taxpayers’ burden increased following the introduction of ETI, only 19.9 percent of the respondents were against the idea of subjecting more businesses to ETI by lowering the threshold for the compulsory ETI, which is currently set at the annual turnover of KRW300 million. The positive survey results likely reflect the success of the efforts of the tax authority to reduce taxpayers’ compliance costs as noted above. A tax authority contemplating compulsory ETI therefore can mitigate the negative effects of compliance burden by carefully taking measures to better serve taxpayers and to reduce taxpayers’ compliance costs.

At the introduction of this paper, the author suggested electronic tax administration including ETIs as a holistic approach to improving tax compliance in order to incorporate both the institutional and legislative approach and the normative and cognitive approach so that ETI can bring about not only institutional changes, but also normative changes. A review of Korea’s experiences in this paper gives credence to the contention that a well-planned and well-executed compulsory ETI can significantly enhance tax compliance in a holistic approach comprising both the institutional and legislative approach and the normative and cognitive approach. Korea’s compulsory ETI induced significant institutional changes. It brought about 39