Moon Administration Announces 'First Tax Revenue Deficit' Warning

National Tax Revenue of 276.6 Trillion KRW Until November Last Year
18.2 Trillion KRW Short of Budget Proposal
Unlikely to Cover Deficit with December Tax Revenue Alone

[Image source=Yonhap News]

[Asia Economy Reporter Kwangho Lee] As the 2019 tax revenue is likely to fall short of the government's planned revenue budget, the first tax revenue shortfall under the Moon Jae-in administration is becoming a reality. If predictions hold true, it will be the first tax revenue shortfall in four years since 2015.

According to the 'Monthly Fiscal Trend January Issue' published by the Ministry of Economy and Finance on the 8th, national tax revenue collected until November last year amounted to 276.6 trillion won, a decrease of 3.3 trillion won compared to the same period the previous year. This is 18.2 trillion won short of last year's revenue budget (294.8 trillion won). In other words, more than 18 trillion won in tax revenue would have needed to come in during December alone, but even in December 2018, which recorded a tax revenue boom, only 13.7 trillion won was collected. Moreover, December lacks major tax items such as income tax, value-added tax, and corporate tax.

In the case of last year, income tax and comprehensive real estate tax were expected to increase, but customs revenue decreased compared to the previous year, making a tax revenue shortfall highly likely. Park Sang-young, head of the Tax Analysis Division, said, "Looking at the progress rate, it is difficult to expect the revenue to almost reach or exceed the budget."

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, also previously stated, "Last year's national tax revenue performance is expected to have a shortfall within 1% compared to the revenue budget." The progress rate of national tax revenue until November was 93.8%, slightly down from 95.3% in the same period last year. Total revenue, including non-tax revenue and fund revenue, was recorded at 435.4 trillion won. Total expenditure during the same period was 443.3 trillion won.

Meanwhile, until November last year, the integrated fiscal balance recorded a deficit of 7.9 trillion won, and the managed fiscal balance recorded a deficit of 45.6 trillion won. National debt increased by about 6 trillion won from the previous month, reaching 704.5 trillion won.

This content was produced with the assistance of AI translation services.