National Tax Revenue, Decrease in Real Estate Transactions... Local Government Revenue Fell by 9 Trillion Won Last Year

Announcement of 2023 Fiscal Year Settlement Results for 243 Local Governments
Focusing on Efficient Financial Management Despite Decreases in Grants and Local Taxes

Last year, the total revenue, including taxes collected by 243 local governments nationwide, was estimated at 385.6 trillion won. This represents a decrease of about 9 trillion won compared to 2022, due to a decline in national tax revenue and a slowdown in real estate transactions.

On the 27th, the Ministry of the Interior and Safety announced the settlement results for the '2023 fiscal year' for local governments nationwide.

The settlement results showed that despite difficult revenue conditions, each local government focused on efficient financial management to prevent contraction of the local economy and welfare for vulnerable groups. In particular, the Ministry of the Interior and Safety operated the Local Finance Cooperation Inspection Team to support the management of financial conditions by local governments, the discovery of available resources such as the Integrated Financial Stabilization Fund, and expenditure restructuring.

According to the 2023 fiscal year local government revenue and expenditure settlement results, the revenue settlement amount was 385.6 trillion won, a decrease of 9 trillion won (2.3%) compared to the 2022 fiscal year. Due to the decrease in national tax revenue and the slowdown in real estate transactions, local allocation tax decreased by 13.6 trillion won (16.8%) and local taxes by 6.1 trillion won (5.2%). However, as a countermeasure, efforts to discover available resources resulted in an increase in additional revenues such as non-tax income (↑1.8%, +500 billion won) and fund transfers (↑102%, +2 trillion won), limiting the decrease in revenue settlement amount to 9 trillion won compared to the previous year.

The expenditure settlement amount was 316.5 trillion won, a decrease of 2.3 trillion won (0.7%) compared to the 2022 fiscal year. Expenditures were reduced in general administrative areas with recurring expenses (25.6%, 7.5 trillion won) and health sectors (23.8%, 1.7 trillion won) following the end of COVID-19. The saved resources were used to provide administrative services closely related to local residents, such as social welfare (↑3.1%, +2.9 trillion won) and culture and tourism (↑10.4%, +1.6 trillion won).

The surplus from the settlement, calculated by subtracting expenditure settlement from revenue settlement, was 69 trillion won, a decrease of 9.0% (6.8 trillion won) compared to the 2022 fiscal year. Of this, the net fiscal surplus excluding carryover amounts and others (43.8 trillion won) was 25.2 trillion won. Additionally, due to the decrease in local allocation tax, the proportion of self-generated revenue in local government resources increased, raising the financial independence ratio of local governments from 49.89% in the 2022 fiscal year to 52.55% in the 2023 fiscal year, an increase of 2.66 percentage points. Meanwhile, the financial autonomy ratio slightly decreased by 0.01 percentage points from 75.61% in 2022 to 75.60% in 2023.

Furthermore, reviewing the financial statements (general and special accounts + funds/total) that show the financial status of local governments for the 2023 fiscal year, local government assets amounted to 1,489.3 trillion won (↑2%, +29.4 trillion won), and liabilities were 65.7 trillion won. The debt-to-asset ratio of local governments decreased by 0.3 percentage points from the 2022 fiscal year to 4.4%, indicating improved fiscal soundness despite the revenue decline.

Han Soon-gi, Director of the Local Finance and Economy Office, stated, "Despite difficult financial conditions last year, local governments focused on projects to protect vulnerable groups and stabilize residents' lives." He added, "The Ministry of the Interior and Safety will continue to actively support local governments in strengthening fiscal soundness and revitalizing the local economy to improve the economic conditions felt by ordinary citizens."

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