Fourteen trillion won tax revenue hike puts year-end target in sight

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Fourteen trillion won tax revenue hike puts year-end target in sight


Government tax revenue stood at 166.5 trillion won ($143.2 billion) as of September, up 14 trillion from the same period last year, largely due to increased capital gains taxes, corporate income taxes and cigarette taxes.

According to a report by the Ministry of Strategy and Finance on Thursday, total government revenue expanded, showing the government has reached 77.2 percent of its revenue target for this year, which also rose 6.7 percentage points from the same month last year.

“If the current tax collection trend continues, it is likely that the government could reach its target revenue by the end of the year,” said a director in charge of taxation analysis at the Finance Ministry.

Including the capital gains tax, total income tax revenue stood at 44.1 trillion won, 6 trillion won higher than last year. Increased housing transactions helped raise the capital gains tax.

As businesses reported better performances than last year, the corporate income tax revenue also rose 2.9 trillion won to 39.2 trillion won.

Other tax revenue, including the new cigarette tax, climbed 3.6 trillion won to 21.5 trillion won.

Despite the increase in total tax revenue, the fiscal deficit is getting wider. While the government’s total revenue, which includes non-tax sources and funds, stood at 280.2 trillion won as of September, its total expenditure marked 298.7 trillion won, showing an 18.5 trillion won deficit. Total expenditures surged 32.3 trillion won due to active fiscal policies.

Excluding funds, the government’s operational fiscal balance produced a 46.3 trillion won deficit, indicating the government is in the red.

The total debt of the central government spiked 42.4 trillion won to 545 trillion won year on year.

“Because of expansionary fiscal policies, the total expenditures soared significantly, but this has made a great contribution to economic revival,” the ministry said in the report.

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