The South Korean finance ministry reported the country’s tax revenue to rise in September by 4.1 trillion won (US$3.5 billion) from a year earlier. The same has been attributed to economic recovery and a boom in asset markets.
According to the Ministry of Economy and Finance, the government collected 26.3 trillion won in taxes in the reporting month, from 22.2 trillion won a year earlier.
The government in its data mentioned that the tax revenue so far this year increased over rising corporate tax income which is in line with the economic recovery, while capital gains tax income also rose over rising stock and property market.
Tax revenue summary
• The data reported tax revenue in the first nine months of the year to rise 59.8 trillion won on-year to 274.5 trillion won.
• The government’s total income, in the same reporting period, inclusive of tax revenue, came to 442.4 trillion won.
• In the same period, as the government increased fiscal spending to cope with the economic fallout of the pandemic the country’s gross expenditures grew 37.2 trillion won on-year to 472 trillion won.
• Hence, as a result the country posted a fiscal deficit of 29.6 trillion won in the nine-month period.
• As of end-October, the central government’s debt rose to 936.5 trillion won, from 819.2 trillion won at the end of last year.
• The ministry had earlier forecasted such debt to reach 937.8 trillion won this year.
The government estimates the growth of tax revenue to slow in the fourth quarter due to relatively less stock and home prices. It has also allowed people hit with the pandemic to delay the payment of some taxes to early next year.
The government for this year is expected to log some 40 trillion won in excess tax revenue.
According to sources, the country’s ruling Democratic Party is planning to provide all people with excess tax revenue another round of emergency cash handouts.
However, Finance Minister Hong Nam-ki reported that the government has already drawn up budgets in a way that tapped 31.5 trillion won for its fiscal spending. This would mean that a surplus of tax revenue available for this year could be around 10 trillion won.