National Tax Revenue Increased by 43.6 Trillion Won from January to May... Asset Tax Revenue and 4th Wave of Pandemic Variables in the Second Half (Comprehensive)

Ministry of Economy and Finance Announces 'Monthly Fiscal Trends July Issue' on 8th
Corporate Tax and Income Tax ↑... Increase of 32.5 Trillion Won Excluding Last Year's Tax Support Effects

[Asia Economy Reporter Jang Sehee] Due to increased real estate and stock transactions and economic recovery, the taxes collected by the government from January to May this year increased by nearly 44 trillion won compared to a year ago. Although government spending increased during the COVID-19 response process, resulting in a fiscal deficit of 48.5 trillion won, the deficit margin has narrowed.

According to the Ministry of Economy and Finance's July issue of the "Monthly Fiscal Trend" published on the 8th, national tax revenue through May this year reached 161.8 trillion won, an increase of 43.6 trillion won compared to the same period last year. The progress rate was 57.2%, 15.8 percentage points ahead of a year ago.

The increase in tax revenue was prominent in corporate tax and value-added tax categories. Due to a faster-than-expected recovery since the second half of last year, corporate performance improved, resulting in an increase of 11.8 trillion won to 37.9 trillion won in corporate tax revenue, and an additional 4.3 trillion won increase to 33.6 trillion won in value-added tax revenue. The heated real estate market led to a 5.9 trillion won increase in capital gains tax revenue, and the stock market boom increased securities transaction tax revenue by 2.2 trillion won. Inheritance tax also increased by 2 trillion won.

Total revenue, combining national tax revenue, non-tax revenue, and fund revenue, amounted to 261.4 trillion won, an increase of 53.2 trillion won compared to the same period last year. Total expenditure through May rose by 22.4 trillion won to 281.9 trillion won compared to a year ago, influenced by active spending for strengthened COVID-19 prevention measures.

Thanks to favorable tax revenue, the fiscal deficit has improved. The integrated fiscal balance deficit in May was 20.5 trillion won, a decrease of 40.8 trillion won compared to the same period last year, and the managed fiscal balance deficit decreased by 29.4 trillion won compared to a year ago.

However, the government remains cautious about the tax revenue outlook for the second half of the year. Real estate and stock transactions are showing signs of slowing compared to last year, and the base effect of last year's deferred payments, which were counted as additional tax revenue this year, has disappeared. A Ministry of Economy and Finance official stated, "Asset tax revenue is stabilizing downward," and added, "Capital gains tax and securities transaction tax are not expected to be collected as much as in the second half of last year."

The variable of the fourth wave of COVID-19 also remains. Regarding this, Professor Park Ki-baek of the Department of Economics at Seoul City University said, "There may be a decrease in revenue due to the fourth wave," but added, "However, since face-to-face service industries such as food and accommodation do not constitute a large portion of total tax revenue, the decrease will not be significant." He further predicted, "The export impact of key companies and domestic sales may rather affect corporate tax." The Ministry of Economy and Finance also analyzed that if the fourth wave occurs, it will partially affect tax revenue.

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