Hong Nam-ki: "Last Year's Tax Revenue Fell Short by 1.3 Trillion Won... Continued Impact This Year Due to Novel Coronavirus"

[Asia Economy Reporter Kim Min-young] Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki stated on the 3rd, "Last year's national tax revenue is expected to be 293.5 trillion won, falling short of the revenue budget by 1.3 trillion won."

At a press briefing held at the Government Complex Sejong on the same day, Deputy Prime Minister Hong said, "The biggest factor is the corporate tax revenue decreasing more than expected due to economic difficulties."

He explained, "The error rate compared to the budget is 0.5%, the lowest level in 17 years," adding, "In recent 3 to 4 years, excess tax revenues continued, causing large discrepancies, but collecting neither too little nor too much is considered optimal fiscal activity. This reflects efforts to improve the tax revenue estimation system."

He also added that the amount of last year's tax revenue error matches the effects of tax reductions such as the securities transaction tax cut (700 billion won), temporary extension of the fuel tax cut (500 billion won), and temporary extension of the individual consumption tax cut (100 billion won).

He predicted that the COVID-19 pandemic could also affect this year's tax revenue situation. Deputy Prime Minister Hong said, "This year's tax revenue forecast is 292 trillion won, lower than last year," and added, "This largely reflects the impact of the decrease in corporate tax revenue last year."

He continued, "To add one point, with decentralization, the local consumption tax rate has increased from 16% to 21%, transferring resources worth 5.1 trillion won to local governments," and said, "So, it can be seen as an effect of 297 trillion won rather than 292 trillion won."

He emphasized, "We need to observe how COVID-19 will affect economic recovery, but if economic difficulties persist, it could impact tax revenue conditions. Although the revenue environment is absolutely not easy, the government will do its best to secure at least the budgeted tax revenue stably."

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