|Effective PIT Rate of Owner‐Operated Businesses ............................................... 34|
|---|
|2.<br>Quantitative Analysis for TIETP ......................................................................................... 35|
|Methodology and Data ......................................................................................... 35|
|Tax Revenue Effects of TIETP ................................................................................ 37|
|Effects on Tax Equality .......................................................................................... 40|
|**V.**<br>**Conclusion**........................................................................................................................ 41|
|**References............................................................................................................................. 44**|
|Appendix 1 Household Income and Expenditure Survey ............................................................. 48|
|Appendix 2 Methodology of PIT Estimation ................................................................................. 49|

# List of Figures

|Figure 1 Shadow Economy and Electronic Transactions ............................................................... 1|
|---|
|Figure 2 Two Types of Shadow Economy and Their Structures ..................................................... 7|
|Figure 3 Korea's Policy Shifts to Reduce the Shadow Economy .................................................. 23|
|Figure 4 Credit, Debit, and Prepaid Card Transactions as Percentage of GDP ............................ 31|
|Figure 5 Personal Income Taxpayers as Percentage of Relevant Income Earners (%) ................ 33|
|Figure 6 Effective PIT Rate for Business Income and Wage and Salary Income (%) .................... 34|
|Figure 7 Tax Revenue Effects of TIETP per Household by Decile in 2014 ..................................... 39|

# List of Tables

|Table 1 Cash Payment Restrictions in the European Union .......................................................... 9|
|---|
|Table 2 Tax Incentives for Household Services ............................................................................ 11|
|Table 3 Policy_Measure Matrix_.................................................................................................... 15|
|Table 4 Korea's Policy Experiments to Reduce Underreporting in Retail Sectors ........................ 22|
|Table 5 Payoff Matrix of Non‐TIETP and TIETP ............................................................................. 24|
|Table 6 Changes to TIETP .............................................................................................................. 26|
|Table 7 Electronically Traceable Payments as Percentage of Private Final Consumption|
|Expenditure ................................................................................................................................... 32|
|Table 8 Distribution of Average Income and PIT Burden per Household by Gross Income Decile<br>....................................................................................................................................................... 38|
|Table 9 Total PIT Revenue Impact of TIETP .................................................................................. 39|
|Table 10 Changes of Gini Coefficients ......................................................................................... 40|
|Table 11 HIES 2014 Descriptive Statistics .................................................................................... 48|

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