Government’s tax collection beats estimatesThe government’s tax collection in the first five months of the year exceeded expectations, according to figures released Tuesday, giving President Moon Jae-in fuel in his push for a supplementary budget that has been held up in the National Assembly due to opposition from rival political parties.
The Ministry of Strategy and Finance said Tuesday that it collected 123.8 trillion won ($107.7 billion) in taxes between January and May, up 11.2 trillion won from the same time last year. The government expected an improvement of 8.8 trillion won when it first proposed a supplementary budget earlier this year.
“Tax revenue went up because companies performed better last year, and an active real estate market helped boost income tax,” said Kang Gil-sung, a director at the Finance Ministry. “The number of self-employed people who filed their taxes also increased compared to the past.”
The government collected 58.3 trillion won in corporate taxes, 4.3 trillion won higher than last year, and 50.6 trillion won in value-added taxes charged on purchases of goods and services, up 2.5 trillion won from a year ago. Revenue from income taxes increased 1.8 trillion won to 48.8 trillion won.
The amount of taxes collected during the first five months of the year accounts for 51.1 percent of the government’s 2017 revenue target of 242.3 trillion won. It represents an improvement of 2.7 percentage points from the progress made at this time last year.
The better-than-expected tax collection offers President Moon leverage to push for an 11.2 trillion won supplementary budget to support his job creation policies, which includes expanding the number of public sector jobs.
The budget, which the Finance Ministry submitted to the National Assembly for approval in June, has been stuck in gridlock. Opposition parties have refused to start discussion on the budget because of their dissatisfaction over Moon’s unilateral appointment of cabinet ministers without legislative approval. Lawmakers have also argued that the country is not facing a national emergency and does not require a supplementary budget.
The government argues the budget is necessary for the country to combat economic uncertainties and continue its recovery momentum.
“There are some signs of recovery in the economy, including improved exports, but many uncertainties remain in the country such as rising youth unemployment and the global rise of protectionism,” Kang said. “Actively implementing fiscal policies is very important at this point, and we will work on being prepared to quickly execute the supplementary budget once it gets passed.”
BY KIM YOUNG-NAM [email@example.com]