Higher wages led to income tax revenue boost in 2015The government’s income tax revenue rose by some 50 percent in 2015 compared to five years ago, while revenue from corporate taxes and value-added taxes remained little changed during the same period.
The National Tax Service (NTS) said the rise in income tax mainly came from higher taxes collected on wages.
According to preliminary NTS data released Sunday, the government’s tax revenue recorded 208.16 trillion won ($187 billion) last year, up 6.4 percent compared to the previous year. This was the first time since the agency’s establishment in 1966 that the amount surpassed the 200 trillion won level. In 2014, the government’s total tax revenue was 195.7 trillion won.
The government’s revenue from income taxes, which includes taxes on wages and rent collection, recorded 62.44 trillion won last year, up 15.4 percent compared to the previous year. The 15.4 percent increase was the highest among taxes that the government collects.
During the same period, tax revenue from corporate taxes rose 5.6 percent to 45.03 trillion won, and the figure for value-added taxes fell 5.2 percent to 54.16 trillion won.
The government’s overall tax revenue in 2015 increased by 15.5 percent compared to 2011. During the same period, income tax revenue jumped 46.3 percent, while that of corporate taxes only rose 0.3 percent, and the figure for value-added taxes rose 4.3 percent.
In 2015, the government collected 28.11 trillion won in earned income taxes, or taxes on wages, up 49.5 percent compared to five years ago.
“The government collected more in earned income taxes as wages in general in Korea continued to rise every year,” an NTS official said.
“However, corporate taxes are more often affected by the economic situation, and the collected amount didn’t increase as sharply since the operating profits reported by the listed companies did not grow as much.”
Corporate tax revenue collected every year has been falling between the 42 trillion won and 45 trillion won level for the past five years, according to the NTS.
Meanwhile, the revenue from value-added taxes rose 4.3 percent in the past five years. In 2014, it has risen a bit but fell 5.2 percent year on year in 2015. The NTS official said that it hasn’t gone up as sharply due to the fall in imports.
BY KIM YOUNG-NAM [firstname.lastname@example.org]