Only Two Months Left This Year... National Tax Revenue Nears 100% of Annual Target

Ministry of Economy and Finance Publishes 'Fiscal Trends December Issue'

[Sejong=Asia Economy Reporter Son Seon-hee] The government’s decision to postpone tax payments for small business owners and others until next year has resulted in a decline in national tax revenue for October, marking the first decrease this year.

However, cumulative national tax revenue from January to October increased by more than 53 trillion won compared to the same period last year, pushing the progress rate toward this year’s tax revenue target beyond 97%. Considering there are two months remaining, there are expectations that the annual surplus tax revenue could once again exceed the government’s estimate of 19 trillion won. National debt has approached 940 trillion won.

According to fiscal trends announced by the Ministry of Economy and Finance on the 9th, national tax revenue from January to October this year totaled 307.4 trillion won, an increase of 53.7 trillion won compared to the same period last year. This figure is about 7 trillion won less than the annual national tax revenue forecast (314.3 trillion won) presented during the second supplementary budget.

Looking at national tax revenue for October alone, it decreased by 6.2 trillion won compared to last year. This was due to the government’s decision to postpone payments of value-added tax and corporate tax until next year for small business owners and SMEs struggling amid the COVID-19 crisis.

However, thanks to the ongoing economic recovery, the three major tax categories?income tax, corporate tax, and value-added tax?all increased. In particular, corporate tax and value-added tax exceeded this year’s targets. Corporate tax collected through October reached 67.3 trillion won, achieving a progress rate of 102.6%. Value-added tax amounted to 71.9 trillion won, with a progress rate of 103.6%. Income tax also collected 96.3 trillion won, driven by factors such as a booming asset market and an increase in employed persons.

Considering that tax revenue collected in November and December last year was 31.7 trillion won, there are concerns that if the tax revenue improvement trend continues for the remainder of this year, the government’s projected surplus tax revenue could again be inaccurate. Choi Young-jeon, head of tax analysis, said, "Considering various trends, around 19 trillion won seems appropriate," adding, "It is unlikely to deviate significantly."

Fund revenue reached 158.6 trillion won through October, achieving a progress rate of 92.7%. This is the highest level since monthly statistics on fund revenue began in 2011. Combining national tax revenue, non-tax revenue, and fund revenue, total revenue from January to October was 489.9 trillion won, an increase of 80.3 trillion won compared to the same period last year. Total expenditure through October was 509.2 trillion won, up 40.7 trillion won from the same period last year.

The integrated fiscal balance deficit, calculated by subtracting total revenue from total expenditure, narrowed to 19.3 trillion won. Compared to last year’s deficit of 59 trillion won, this represents a reduction of nearly 40 trillion won. As of October, central government debt stood at 939.6 trillion won.

Ahn Do-geol, the second vice minister of the Ministry of Economy and Finance, stated, "With the reduction of 2.5 trillion won in government bond issuance using surplus tax revenue, national debt is expected to decrease by a total of 6.2 trillion won this year."

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