Real Estate 'Deok' National Tax in Jan-Feb Up 11 Trillion Won YoY... Deficit Expected to Widen Going Forward (Comprehensive)

"Expenditures Exceed Revenues"... Integrated Fiscal Balance at -12.7 Trillion Won

Real estate stock photo / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Jang Sehee] Recently, with an increase in real estate transactions and the payment of deferred income taxes by small individual business owners, national tax revenue for January and February rose by 11 trillion won compared to the previous year. Due to expenditures exceeding revenues, the integrated fiscal balance showed a deficit in February, and national debt increased by 34 trillion won compared to one year ago due to government bond issuance and other factors.

According to the 'Monthly Fiscal Trend April Issue' released by the Ministry of Economy and Finance on the 7th, cumulative national tax revenue for January and February this year was 57.8 trillion won, an increase of 11 trillion won compared to the same period last year. The tax revenue progress rate, which indicates the ratio of actual collected taxes to the taxes expected to be collected over the year, was 20.4%, up 3.7 percentage points from 16.7% in the same period last year.

This increase is attributed to the rise in real estate transaction volume and the payment of deferred amounts from the three-month deferral of comprehensive income tax prepayments for small individual business owners, resulting in an increase of 4.8 trillion won in income tax.

Cumulative value-added tax for January and February was 16.2 trillion won, up 2.6 trillion won from the previous year.

Corporate tax for January and February was 2.9 trillion won, an increase of 900 billion won compared to the previous year, and other national taxes including comprehensive real estate tax, securities transaction tax, and stamp tax totaled 9.3 trillion won, up 2.2 trillion won.

Customs duties totaled 1.1 trillion won cumulatively, down 300 billion won from the previous year, while transportation tax increased by 400 billion won to 3 trillion won.

The integrated fiscal balance, calculated by subtracting total expenditures from total revenues, recorded a deficit of 12.7 trillion won cumulatively for January and February. However, the deficit narrowed compared to 26.2 trillion won in the same period last year. The managed fiscal balance, which excludes social security funds to reflect the government's actual fiscal condition, recorded a deficit of 22.3 trillion won cumulatively for January and February, also an improvement from 30.9 trillion won in the same period last year.

Meanwhile, experts point out that tax revenues may shrink due to expansionary fiscal policies amid the prolonged COVID-19 pandemic. Professor Kim Woochul of the Taxation Department at Seoul City University stated, "Corporate tax filings in March this year are also based on last year's performance, so there is a high possibility of a decrease," adding, "Going forward, the impact of COVID-19 will become apparent, making the revenue environment more unfavorable." He also noted, "Income tax may also decrease in the future as capital gains tax and others decline due to the gradual cooling of the stock market boom."

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