Tax revenue up so far this year
The government said it collected 96.9 trillion won ($82.3 billion) in tax revenue as of the end of April, an 18.1 trillion won, or 22.9 percent, increase year on year.
The tax revenue accounted for 43.5 percent of the government’s 2016 target of 222.9 trillion won. This is an increase of 7 percentage points year on year.
“The extended individual consumption tax [which will last until this month] and the early execution of government spending improved consumption in general in the first quarter, and this helped us collect more taxes,” said Chang Jung-jin, a director at the Ministry of Strategy and Finance.
The ministry said it collected 23.5 trillion won in corporate taxes and 30 trillion won in value-added taxes charged on purchases of goods and services. The amount of corporate and value-added taxes collected rose 10.5 percent and 7.5 percent, respectively, compared to the same period last year.
“Companies have become more profitable, and private consumption in the first quarter rose 2.1 percent compared to the previous year,” Chang said.
Income tax collection also increased 3.9 trillion won or 5.6 percent from the previous year, hitting 34.5 trillion won.
“The real estate market has been vitalized and average income rose in general,” the ministry added.
During the first four months of the year, the government earned a total 150.8 trillion won through both tax and non-tax income. The ministry said it spent some 146.6 trillion won during the same period, recording a surplus of 4.2 trillion won.
But the ministry pointed out that the rest of the year might not be so positive.
“Domestic factors, such as corporate restructuring and weakened consumer sentiment, and foreign factors including the possible U.S. key interest rate increase and a slowdown in the Chinese economy might have negative impacts,” Chang said.
Government debt recorded 582.9 trillion won as of April, up 26.3 trillion won, or 4.7 percent, from the end of last year.
Meanwhile, 17 government branches submitted their budgets for 2017. According to the Finance Ministry, the branches said they would need 398.1 trillion won for 2017, up 11.7 trillion won, or 3 percent, from 2016.
“The 3-percent growth is the lowest in recent years, and government branches are asking for less money due to the ongoing financial reform,” said Kim Dong-il, a director at the Finance Ministry on Friday.
The year-on-year growth was 4.1 percent for the 2016 budget and 6 percent for 2015.
By sector, the government branches said they need more money to spend on welfare, education, culture, research and development, and defense. They are planning to reduce spending on agricultural and environmental issues.
In particular, the government will try to reduce its investments in the energy sector by having more private companies get involved in ongoing projects.
“We will push through finance reform by taking various measures such as reducing 10 percent of the money allocated for discretionary spending, and we will focus on using that saved money to create new jobs and find new growth engines for the economy,” Kim said.
The Finance Ministry will review the budget and will submit finalized plans to the National Assembly by Sept. 2.
BY KIM YOUNG-NAM [firstname.lastname@example.org]