June 26, 2022

South Korean finance ministry announced the country’s tax revenue to fall 6.2 trillion won ($5.3 billion) in October from a year earlier. Such a record has been due to the government’s delay in payment of some taxes by small merchants and firms hit by the pandemic.

According to the Ministry of Economy and Finance, the government in October collected 32.9 trillion won in taxes, in comparison with 39.1 trillion won a year earlier.

Between January and September, the tax revenue increased every month from a year earlier. This was due to rise in corporate tax income with the economic recovery and capital gains tax income gain amid a boom in the stock and property market.

However, the ministry mentioned that the tax revenue fell on-year in October. This was due to the government postponing the payment of some taxes to early next year by pandemic-hit people. Tax revenue in the first ten months of the year rose 53.7 trillion won to 307.4 trillion won.

The government’s total income, including tax revenue in the January-October period, came to 489.9 trillion won, up 80.3 trillion won from the previous year.

The country’s gross expenditures in the period grew 40.7 trillion won on-year to 509.2 trillion won over government’s increased spending to help vulnerable people cope with the fallout of the pandemic.

As a result, the country in the 10-month period posted a fiscal deficit of 19.3 trillion won, smaller than a shortfall of 59 trillion won the previous year.

According to the ministry, it expects that if the current trends continue, the government’s fiscal deficit for this year will likely be smaller than its earlier projection of 90.3 trillion won. While it also forecasts the national debt this year to fall by 6.2 trillion won from its earlier estimate due to repaid part of the debt and scaling down the issuance of state bonds.

As of end-October, the government debt amounted to 939.6 trillion won, up from 819.2 trillion won at the end of last year.

The government in late November had unveiled 12.7 trillion won in support for pandemic-hit merchants and vulnerable people with excess tax revenue.