October National Tax Revenue Increased by 500 Billion Won

First Monthly Revenue Increase This Year
Impact of 4.3% Growth in VAT Revenue

Last month, national tax revenue increased by 500 billion KRW compared to the same period last year. This marks the first monthly increase in national tax revenue this year. The significant rise was largely due to an increase in value-added tax revenue, which grew by nearly 1 trillion KRW as consumption increased.

The Ministry of Economy and Finance announced the 'October National Tax Revenue Status' on the 30th, containing this information. Last month's national tax revenue was 38.6 trillion KRW, up 1.4% (500 billion KRW) from the same month last year (38.1 trillion KRW). This is the first time this year that monthly national tax revenue has shifted to an increase compared to the previous year. Due to a 0.3% increase in private consumption in the third quarter compared to the same period last year, value-added tax revenue rose by 800 billion KRW (4.3%) year-on-year. Securities transaction tax also increased by 100 billion KRW this month due to a rise in stock trading volume. A Ministry of Economy and Finance official explained, “The trend in national tax revenue is gradually improving,” and added, “This aligns with the expected trend from the revised forecast.”

However, due to the continued impact of a slowdown in real estate transactions and poor corporate operating profits, there was little change in the cumulative national tax revenue trend. From January to October this year, cumulative national tax revenue was 305.2 trillion KRW, down 5.04 trillion KRW compared to the same period last year. The progress rate of October’s national tax revenue against the budget was 76.2%. This is significantly below last October’s performance progress rate (89.8%) and the recent 5-year average performance progress rate (89.3%). However, the progress rate against the revised national tax revenue forecast was 89.4%, similar to the recent 5-year average.

Looking at revenue status by tax category, corporate tax collected from January to October was 76.1 trillion KRW, down 23.7% (23.7 trillion KRW) from the same period last year. This decline is attributed to poor corporate operating profits last year and a decrease in mid-term prepayment tax amounts in August. Corporate tax revenue for October alone was 4.2 trillion KRW, up 100 billion KRW from the previous year. October is typically when the mid-term corporate tax prepayment stage concludes, so a slight increase compared to the previous year was observed.

Income tax revenue from January to October this year was 93.9 trillion KRW, down 14.6 trillion KRW from the same period last year. This was largely due to a slowdown in real estate transactions and base effects. Income tax in October also decreased to 400 billion KRW due to a decline in capital gains tax caused by the slowdown in real estate transactions. Value-added tax revenue from January to October was 74.2 trillion KRW, down 5.4 trillion KRW (6.8%) from the same period last year. The Ministry of Economy and Finance explained this as a base effect caused by reduced revenue and tax support measures. Inheritance and gift tax from January to October was 12 trillion KRW, down 7.4% (1 trillion KRW) from the same period last year. October’s inheritance and gift tax also decreased by 8.3% year-on-year, falling by 100 billion KRW. Cumulative customs duties this year also declined by 3 trillion KRW to 6.1 trillion KRW due to reduced imports, a 32.8% decrease compared to the previous year.

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