Tax collections up, gov't tempted to spend more
On Jan. 13, the Finance Ministry will release its estimates for taxes collected in November.
In the first 10 months of 2021, the government collected 307.4 trillion won ($261.5 billion), a 21 percent increase over a year earlier.
The government initially forecast 282.8 trillion won in collections for 2021, which it raised to 314.3 trillion won in July 2021.
By the end of October, it had collected nearly 98 percent of that forecast. With comprehensive real estate taxes due on Dec. 15, the total amount should be much more.
The DP has argued that with so much additional taxes collected, the government has more than enough to spare for another extra budget. They are favoring a supplementary budget of 50 trillion won.
Appearing on a TV show on Sunday, Prime Minister Kim Boo-kyum said the government will consider expanding its support for small shop owners hurt by Covid-19 social distancing restrictions.
“We are going to seriously review [demands from the DP for a supplementary budget],” Kim said.
The DP has argued that compensation for small businesses that were hurt by the social distancing regulations should be raised to 100 percent of their losses.
The government currently only compensates 80 percent.
Kim said the government is looking into all angles including raising compensation to 90 percent.
A week ago, Finance Minister Hong Nam-ki, who was strongly against another supplementary budget, showed signs of wavering, noting that the government will look into increasing support for small businesses.
Ruling party presidential candidate Lee Jae-myung has been criticizing the government for its lack of support and even threatened to downsize the finance ministry.
“[Fiscal support for small businesses] is not moving forward because government bureaucrats or [more accurately] Finance Ministry officials' thoughts are buried in their paperwork,” said Lee on Saturday during a town hall meeting with small business owners.
He said the government should give support to small businesses in cash rather than loans, and instead of the 80 percent compensation, business owners should fully be compensated for losses.
The DP is hoping to approve a supplementary budget ahead of Feb. 15.
BY LEE HO-JEONG [email@example.com]