Deputy Minister Ki Jae: "Fiscal Deficit Increased by COVID-19 Must Be Reduced to Normal Levels"

2020~2024 National Fiscal Management Plan Discussion Meeting

[Asia Economy Reporter Jang Sehee] The government stated that it needs to reduce and adjust the significantly increased fiscal deficit that occurred in a short period during the response to the novel coronavirus infection (COVID-19).

On the 20th, Ahn Il-hwan, Vice Minister of Strategy and Finance, said in the opening remarks at the "2020-2024 National Fiscal Management Plan Establishment Forum" held at the Korea Chamber of Commerce and Industry in Seoul, "We must actively promote drastic structural adjustment efforts for temporarily increased projects and unnecessary expenditures."

Vice Minister Ahn also predicted that national tax revenue will decrease significantly compared to the initial forecast.

He added, "The economic activity contraction caused by COVID-19 will weaken the revenue base for a considerable period, and national tax revenue is expected to decrease significantly compared to the initial forecast." In fact, national tax revenue from January to May this year was 118.2 trillion won, down 21.3 trillion won from last year.

Regarding this, he explained, "Based on more accurate predictions of future fiscal demand changes, we will comprehensively review the existing fiscal expenditure structure," and "We will also greatly strengthen the feedback function of the fiscal project evaluation system, such as in-depth evaluations and subsidy project evaluations, to enhance the investment effectiveness of limited resources."

He continued, "By completely rebuilding the budget accounting system, we will expand the production and disclosure of user-friendly fiscal information," and added, "We will continue efforts to strengthen taxation on undeclared income, revise tax exemption and reduction systems, expand non-tax revenue, and diversify funding sources through revitalizing private investment."

Kim Yoo-chan, President of the Korea Institute of Public Finance, said, "To prepare for the upcoming super-aged society, it is necessary to proactively organize the elderly welfare system," and "To guarantee income for old age, we need to expand elderly jobs and activate retirement pensions and personal pensions." He also mentioned, "Investment and regulatory improvement measures for fostering non-face-to-face new industries are also necessary."

Meanwhile, the Ministry of Strategy and Finance plans to submit next year's budget proposal and the 2020-2024 National Fiscal Management Plan to the National Assembly by September 3, referencing experts' opinions. The National Fiscal Management Plan shows the fiscal outlook for five years, including the current year.

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