Hong Nam-ki Responds to Criticism, "Regret Over Ruling Party's Mention of 'Intentional Excess Tax Revenue'"

Deputy Prime Minister for Economic Affairs Hong Nam-ki, who has embarked on an inspection of the cost of living at the grassroots level, is holding a meeting with Jeong Yeon-tae, CEO of Nonghyup Distribution, and others at Hanaro Mart Yangjae Branch on the morning of the 17th. 2021.11.17 [Joint Coverage] [Image Source=Yonhap News]

[Sejong=Asia Economy Reporter Son Seon-hee] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said on the 17th, "I apologize once again for the tax revenue errors such as the occurrence of excess tax revenue," but added, "However, it is regrettable that the opposing side mentioned the government's intentionality." This remark expressed discomfort in response to the ruling Democratic Party's statement that "if intentional, it is a matter for a national audit."

Deputy Prime Minister Hong made these remarks during an on-site visit related to inflation while speaking with reporters. He said, "Public officials do not work like that." He added, "Usually, the National Assembly Budget Office is a relatively authoritative forecasting institution, and last year's tax revenue forecast, the revenue forecast for the second supplementary budget in June-July this year, and the 2022 revenue forecast all do not differ significantly from the government's projections."

In fact, the tax revenue forecast at the time of last year's main budget was 282.7 trillion won by the government and 284.7 trillion won by the Budget Office. Also, at the time of the second supplementary budget in July, the revised revenue forecast was 314.3 trillion won by the government and 318.2 trillion won by the Budget Office.

Deputy Prime Minister Hong explained, "The excess tax revenue of 31.5 trillion won at the time of the second supplementary budget in July was directly reflected in the revised revenue, and all of it was spent on supplementary budget projects such as the National Mutual Aid Fund and the Small Business Hope Recovery Fund." He continued, "Since then, in the second half of the year, the economic recovery speed has accelerated more rapidly, and the asset markets such as real estate and stocks have been more active than expected, which is expected to result in an additional excess tax revenue of about 19 trillion won."

He added, "Of the excess tax revenue of about 19 trillion won, about 40% (7.6 trillion won) is allocated to local governments as grant settlements, and the rest is primarily used as the first phase of funding for this year's shortfall in small business loss compensation, additional support measures for industries not covered by loss compensation, and the remainder will be carried over as next year's surplus." This means that the occurrence of excess tax revenue does not create funds for the "universal support payment" claimed by the ruling party.

Deputy Prime Minister Hong said, "The National Assembly's review of the 2022 budget bill, that is, the deliberation of the Budget and Accounts Committee's coefficient adjustment subcommittee, officially began yesterday," and added, "The government will work closely with the National Assembly to sincerely engage in the review of next year's budget bill."

However, he reiterated, "As always, from the perspective of the fiscal authorities, the ultimate goal of all policies and budgets is 'the nation and the people' above all else, and it is a fundamental duty to adhere to fiscal principles and standards in fiscal management."

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