January National Tax Approaches 50 Trillion Won... "Impact of COVID-19 Base Effect"

Ministry of Economy and Finance Announces 'March Fiscal Trends'

[Asia Economy Sejong=Reporter Son Seon-hee] It has been revealed that the national tax revenue collected in January alone approached 50 trillion won. This is an increase of more than 10 trillion won compared to a year ago, which is analyzed as a base effect resulting from adjusting the payment deadlines for various taxes for small business owners and others affected by the COVID-19 pandemic.

According to the 'March Fiscal Trend' announced by the Ministry of Economy and Finance on the 17th, national tax revenue in January was 49.7 trillion won, an increase of 10.8 trillion won compared to the same month last year. The progress rate against the revenue budget was 14.5%. This is the highest progress rate for January in the five years since the Moon Jae-in administration took office.

The item with the largest change due to tax support effects was value-added tax (VAT). In January alone, a total of 24.4 trillion won was collected, reaching a progress rate of 31.5%. The government postponed the VAT (3.2 trillion won) that should have been collected in January last year for 6.65 million individual business owners facing difficulties due to COVID-19 to February, causing a base effect. Additionally, the payment deadline for the second half of last year's VAT (2.3 trillion won) was deferred (from October 2021 to January 2022), resulting in relatively higher collections this year. However, this is a temporary factor, and its impact is expected to be offset in the February fiscal trend report.

Along with VAT, income tax and corporate tax, which constitute the three main pillars of national tax revenue, were also collected relatively more than last year. Employment recovered significantly, with the number of employed persons increasing by more than 1.13 million in January, leading to a 1.5 trillion won increase in earned income tax.

In the case of corporate tax, similar to VAT, the government extended the corporate tax interim payment deadline by three months (from August 2021 to November 2021) for small and medium-sized enterprises struggling due to COVID-19. As a result, corporate tax collected in January, paid in two installments within two months, was recorded at 1.2 trillion won. Considering that corporate tax revenue increased by 900 billion won in January, excluding deferred revenue, actual corporate tax decreased compared to January last year.

An official from the Ministry of Economy and Finance explained, "Excluding tax deferrals due to tax support, the increase in tax revenue due to economic recovery is 3.2 trillion won," and added, "Since the progress rate in January accounts for a relatively small portion of the total tax revenue, we need to observe further."

The total revenue in January, combining national tax revenue, non-tax revenue, and fund revenue, was 65.3 trillion won, an increase of 8 trillion won compared to a year ago.

Total expenditure in January was 56.3 trillion won, an increase of 2.4 trillion won during the same period. Accordingly, the integrated fiscal balance (total revenue - total expenditure) recorded a surplus of 9 trillion won in January. After deducting the four major social security funds from the integrated fiscal balance to show the government's actual fiscal status, the management fiscal balance showed a surplus of 6.6 trillion won.

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