Government Borrows 150 Trillion Won in Short-Term Funds Due to Tax Revenue Shortfall... Interest Alone Reaches 400 Billion Won

The government has reportedly borrowed over 150 trillion won in short-term funds this year. The interest the government must pay amounts to 400 billion won.

According to the office of Han Byung-do, a member of the Democratic Party of Korea, the government’s short-term borrowing from January to August this year totaled approximately 153.6 trillion won. Specifically, the government procured 113.6 trillion won through temporary borrowing from the Bank of Korea and raised 40 trillion won by issuing treasury bonds.

The total interest on the 113.6 trillion won temporary borrowing is 149.2 billion won, and the interest on the treasury bonds is 245.5 billion won, making the total interest on short-term funds 394.7 billion won.

The background for the government’s short-term borrowing is the deepening tax revenue shortfall. According to the Ministry of Economy and Finance, national tax revenue from January to July this year decreased by 4.34 trillion won compared to the same period last year. The tax revenue progress rate is 54.3%, down 11.6 percentage points from 65.9% during the same period last year. The fiscal authorities explain the tax shortfall by saying they borrow money short-term from the Bank of Korea and repay it as taxes are collected.

Assemblyman Han Byung-do said, "Relying on short-term borrowing to resolve the tax shortfall is the worst of all measures," and added, "The government should prepare fundamental countermeasures along with the tax revenue re-estimation results."

[Image source=Yonhap News]

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