Pohang City "Strong Expenditure Restructuring"... This Year's Revenue and Local Allocation Tax Expected to Decrease by 90 Billion Won

On the 21st, sulfur cosmos flowers along the waterfront of the Hyeongsan River estuary are soothing the hearts of citizens weary from COVID-19. The city of Pohang sowed sulfur cosmos seeds here last May.

[Asia Economy Yeongnam Reporting Headquarters Reporter Dongwook Park] Pohang City in Gyeongbuk has entered a tight fiscal management mode, anticipating a sharp deterioration in next year's economic conditions due to the prolonged impact of the novel coronavirus infection (COVID-19).

According to Pohang City on the 22nd, due to the overall slump in the local economy including the steel industry, its own revenue is expected to decrease by about 60 billion KRW, and local allocation tax is expected to be reduced by 30 billion KRW due to the government's low domestic tax collection rate. Next year, revenue is expected to decrease by about 90 billion KRW compared to this year, while expenditures are expected to increase by about 60 billion KRW due to legal and essential expenses and increased project costs, making a total deficit of 150 billion KRW inevitable.

Additionally, the central government has already notified all local governments nationwide of a reduction in allocation tax this year, and in Pohang City's case, a reduction of 20.6 billion KRW has been confirmed. With the decrease in its own revenue and additional expenses within the year, a deficit of about 50 billion KRW is expected, leading all departments to be urged to reduce regular expenses by 10% and to cut back or abolish event and festival-related expenses.

For projects that cannot be executed within the year, execution will be restricted, and an execution budget will be prepared to compensate 30 billion KRW, while the remaining shortfall of 20 billion KRW will be covered by issuing local bonds.

In this regard, Pohang City began a large-scale expenditure restructuring and strategic budget operation procedure to overcome next year's economic crisis starting with the '2021 Budget Formulation and Operation Guidelines Meeting' on the 21st. The city plans to focus on ensuring citizens' stable daily lives, revitalizing the local economy, and expanding investment in innovative growth, anticipating that the difficult economic situation due to COVID-19 will continue next year.

A Pohang City official stated, "Most citizens who are suffering from the local economic slump feel these measures are necessary, and under the principle of selection and concentration, we will efficiently formulate the budget through strong expenditure restructuring and zero-based review so that resources can be expanded for areas that will lead Pohang City's future."

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