"Excess Tax Revenue of Over 53 Trillion Won Could Have Been Fully Predicted Before This Year's Presidential Election"

Expert Panel Discussion on Investigating Excess Tax Revenue and Fiscal Reform
Lee Sang-min, Senior Research Fellow at Nara Salrim Research Institute, "It Could Have Been Identified by September Last Year or at Least by January This Year"

[Asia Economy Reporter Naju-seok] The Ministry of Economy and Finance could have identified the possibility of a large-scale excess tax revenue this year as early as September last year, or at the latest after the closing of last year's revenue and expenditure in January this year.

Park Hong-geun, Acting Leader and Floor Leader of the Democratic Party of Korea, is attending the first meeting of the Task Force for Excess Tax Revenue Investigation and Fiscal Reform Promotion held at the National Assembly on the 10th, delivering opening remarks. Photo by Yoon Dong-joo doso7@

On the 21st, the National Assembly held an "Expert Forum on the Investigation of Excess Tax Revenue and Fiscal Reform," hosted by the Democratic Party's Excess Tax Revenue Investigation and Fiscal Reform Promotion Team. At the forum, Lee Sang-min, Senior Research Fellow at the Nara Salrim Research Institute, who presented the keynote speech, stated, "The fact that last year's excess tax revenue exceeded 55 trillion won, approaching 60 trillion won, could have been known as early as September last year," adding, "(At that time) it should have been recognized that last year's final settlement amount (actual collected tax) was over 340 trillion won, and it could have been inferred that this year's National Assembly budget of 343 trillion won was excessively underestimated."

He continued, "At the very least, by January this year, after the closing of last year's revenue and expenditure, it should have been known that the excess tax revenue reached 60 trillion won."

If it had been recognized that the tax collected last year (final settlement of 344.1 trillion won) was significantly higher than the Ministry of Economy and Finance's initial estimate (2021 budget of 282.7 trillion won), it naturally follows that the tax revenue collected this year would exceed the budget proposal submitted to the National Assembly (343.4 trillion won). Furthermore, since about 6 trillion won of last year's tax was deferred to be collected this year, the amount of tax revenue is bound to increase, he added.

Regarding the reasons for the higher tax revenue, some have pointed out that it cannot be explained solely by the sharp increase in corporate tax or real estate-related taxes. The research fellow noted, "This year's excess tax revenue is not simply the result of unexpected corporate tax collection or a boom in the real estate market," emphasizing, "It is a fundamental and structural cause involving increases in almost all tax categories, including corporate tax, income tax, and value-added tax."

In fact, looking at the tax collected up to March this year, income tax amounted to 35.3 trillion won, which is 23.4% more than the 28.6 trillion won collected in March last year.

Regarding improvement measures, the fellow pointed out that the Ministry of Economy and Finance should disclose more information related to the excess tax revenue issue. He argued, "Daily tax collection details and detailed tax revenue simulation estimates should be disclosed." He also proposed that the government should be able to reflect changes in tax revenue estimates after submitting the budget proposal to the National Assembly, based on updated economic conditions. Since the government submits the budget proposal in August and the National Assembly reviews it only after October, any changes in tax revenue estimates during this period should be incorporated.

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