Ministry of Economy and Finance This Week's National Assembly Audit... Tax Revenue Shortfall and R&D Budget Cuts Under Scrutiny

As the National Assembly enters the second week of the audit starting on the 16th, issues such as the government's unprecedented tax revenue shortfall and budget cuts are expected to come under scrutiny.

According to government ministries on the 15th, the Ministry of Economy and Finance will undergo a National Assembly audit by the Planning and Finance Committee over two days, on the 19th and 20th. On the 19th, the economic and fiscal policy sectors will be reviewed in Sejong, and on the 20th, the tax policy sector will be examined at the National Assembly in Yeouido.

During the Ministry of Economy and Finance's audit, the ruling and opposition parties are expected to clash over the government's record-breaking tax revenue deficit. According to the monthly fiscal trends released by the Ministry, as of August, the central government debt (national debt) stood at 1,110 trillion won, an increase of 76.5 trillion won compared to the end of the previous year. This figure exceeds the government's annual projection of 1,101.7 trillion won. There are also forecasts that next year, central government debt will expand to 1,163.4 trillion won, 61.7 trillion won higher than this year's projection.

The sharp increase in national debt is attributed to the expansionary fiscal policies implemented during the Moon Jae-in administration in response to the COVID-19 crisis. National debt, which was 626.9 trillion won at the end of 2016 just before Moon's administration began, increased by more than 400 trillion won during his term. Although the Yoon Seok-yeol administration has pursued fiscal tightening, it is currently difficult to reduce the fiscal deficit immediately.

On the morning of the 9th, at the Seoul Government Complex, Deputy Prime Minister for Economy Choo Kyung-ho is presiding over the Emergency Economic Ministers' Meeting and Export Investment Measures Meeting. Photo by Jo Yong-jun jun21@

Budget cuts of around 7 trillion won in research and development (R&D) for next year are also expected to spark debate. The opposition parties criticize the Yoon administration for cutting the R&D budget for the first time in 33 years and are calling for its restoration. Earlier, the Ministry of Science and ICT proposed an R&D budget for next year of 25.9 trillion won, a reduction of 5.1 trillion won (61.6%) compared to this year. In response, the 'R&D Budget Restoration Countermeasures Committee' (hereafter, the Committee) staged a sit-in protest demanding the restoration of the R&D budget.

The Legislation and Judiciary Committee is expected to continue debates during the audit on the 20th regarding allegations of statistical manipulation during the Moon administration, focusing on the Daejeon District Prosecutors' Office and others who previously conducted a search and seizure at Statistics Korea.

Statistics Korea recently announced that until 2016, household income and expenditure were surveyed simultaneously on a quarterly basis, but in 2017 and 2018, income data (quarterly statistics) and expenditure data (annual statistics) were published separately. The Board of Audit and Inspection pointed out in a recent interim audit that when household income appeared to have decreased in the second quarter of 2017, Statistics Korea manipulated the data by arbitrarily applying a 'weight for employed households' to the income of 'households with employed persons,' making it appear as if household income had increased.

In response, on the 12th, the head of Statistics Korea stated during the National Assembly audit that "there was a procedural flaw in releasing detailed microdata externally without legal grounds."

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