Tax collections up 13.6% in first 9 months to W189 trillionIn the first nine months of the year, the government collected 22.6 trillion won ($19.6 billion) more in taxes than in the same period last year - or 13.6 percent more - thanks to increases in income, corporate and value-added tax.
According to the Ministry of Strategy and Finance on Thursday, a total of 189.1 trillion won in taxes were collected from January through September. This is 81.3 percent of the government’s target of 232.7 trillion won for this year. In the same period in 2015, only 77.2 percent was collected.
At the current rate of collections, the government will easily surpass this year’s goal.
Corporate tax grew at the fastest rate. In the first nine months, 46.9 trillion won worth of corporate tax was collected. This is 7.7 trillion won or 19.6 percent more than taxes collected from businesses in the first nine months of last year. It is 91.3 percent of the annual target.
The ministry credited favorable performances by companies and a reformed tax code that has reduced tax benefits and deductions.
Value-added taxes totaled 46.4 trillion won in the period, 6.6 trillion won or 16.6 percent larger than the same period a year ago. This was largely thanks to improved consumer spending in the first half of the year.
Income tax collections reached 50.4 trillion won, 6.3 trillion won more than a year ago. This is a 14.3 percent increase year-on-year. The government cited recovery in the real estate market as the primary contributor to higher income tax collection.
The government’s total income in the first nine months was 309.9 trillion won including taxes and non-tax related inflows. That is 29.7 trillion won larger than in the previous year, a 10.6 percent rise. It is 77.3 percent of this year’s target of 401 trillion won.
Spending grew 3.1 trillion won to reach 301.7 trillion won, bringing the consolidated fiscal balance to 8.2 trillion won. Last year the government ran a deficit of 18.5 trillion won with larger spending to counteract the effects of an outbreak of Middle East respiratory syndrome (MERS).
However, in September the accumulated fiscal balance, excluding social funds - the national pension fund, teachers’ pensions, employment insurance and occupational health and safety insurance - ran a 22.7 trillion won deficit. This was larger than the 11.6 trillion won deficit for the first eight months of the year. This was largely due to the supplementary budget that kicked in in September.
“The economic stimulus measures including the supplementary budget were behind the widened fiscal deficit,” said a Finance Ministry official. “As there are external and internal uncertainties, the government plans to keep monitoring the situation.”
Government debt increased 37 trillion won in the first nine months.
BY LEE HO-JEONG [firstname.lastname@example.org]