[2023 Budget] Next Year's National Tax Revenue 400 Trillion Won... Only 4 Trillion Increase Due to Economic Slowdown

Economic Slowdown Shrinks Asset Market... Capital Gains Tax Decreases While Earned Income Tax Increases
Corporate Tax Expected to Remain at This Year's Level
If Economic Growth Rate Slows Further, National Tax Revenue May Decline More Than Last Year

[Asia Economy Sejong=Reporter Kwon Haeyoung] Due to concerns over a global economic slowdown and contraction in asset markets such as real estate and stocks, next year's national tax revenue is expected to increase by only about 4 trillion won compared to this year.

According to the "2022~2023 National Tax Revenue Forecast" announced by the Ministry of Economy and Finance on the 30th, next year's national tax revenue is estimated at 400.457 trillion won. This is 1.0% (3.8072 trillion won) higher than this year's national tax revenue forecast (396.6498 trillion won) released during the second supplementary budget formulation this year, and 0.8% (3.3684 trillion won) higher than the revised forecast for this year (397.0886 trillion won) announced on the same day.

By major tax items, corporate tax revenue is estimated to be 104.9969 trillion won, similar to this year's 104.0662 trillion won. This is attributed to the slowdown in corporate earnings growth in the second half due to the global economic growth slowdown and rising international raw material prices, as well as the base effect of advance interim payments made this year. Income tax revenue is predicted to increase by 3.1% compared to this year, reaching 131.8632 trillion won. While capital gains tax related to assets is expected to decrease by 13.2% due to declines in real estate and stock prices and reduced transactions caused by interest rate hikes, wage increases are expected to raise earned income tax revenue by 4.6%, according to the government. Securities transaction tax is forecasted to shrink by 34.0% to 4.9739 trillion won. Comprehensive real estate tax revenue is also expected to decrease by 33.7% to 5.7133 trillion won compared to this year.

On the other hand, value-added tax is expected to increase by 4.9% to 83.2035 trillion won, and individual consumption tax by 0.5% to 10.1943 trillion won, due to increased consumption and rising prices. Inheritance and gift tax is expected to increase by 1.2238 trillion won, and customs duties by 662.4 billion won.

However, there are concerns that if the economic growth rate slows down further next year, national tax revenue could decrease more than this year. Regarding this, Jeong Jeonghoon, Director General of Tax Policy at the Ministry of Economy and Finance, explained, "The earnings of about 1,000 companies listed on KOSPI and KOSDAQ are very good, so even considering the economic downturn and corporate operating profit decline in the second half, next year's corporate tax revenue could be at this year's level. Except for times of the foreign exchange crisis, global financial crisis, and COVID-19 crisis, there has never been a period when national tax revenue decreased."

The tax burden rate, which refers to the ratio of national and local tax revenue to gross domestic product (GDP), is expected to fall by 0.6 percentage points from the previous year to 22.6%. However, the government expects the tax burden rate to slightly increase again in 2024 due to environmental factors contributing to tax revenue growth.

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