National Tax Revenue at 373.9 Trillion Won... 8.5 Trillion Won Tax Revenue Hole vs. Main Budget

Release of the 2025 Annual National Tax Revenue Settlement

Last year, national tax revenue fell short of the government’s main budget, resulting in a tax revenue shortfall in the 8 trillion won range. Although revenue increased sharply from the previous year thanks to a recovery in corporate earnings and other factors, it still did not reach the level assumed in the initial budget, meaning the pattern of a “tax revenue hole” was not completely resolved. The tax base itself has recovered, but there remains a gap compared with the optimistic outlook at the time of budget formulation.

According to the “2025 Annual National Tax Revenue Settlement” released by the Ministry of Economy and Finance on the 10th, last year’s national tax revenue totaled 373.9 trillion won. This is 8.5 trillion won less than the 382.4 trillion won in the government’s originally formulated main budget. In percentage terms, this represents -2.2% compared with the main budget. However, compared with the previous year’s actual revenue of 336.5 trillion won, it increased by 37.4 trillion won, meaning the revenue base itself improved significantly.

By tax item, the largest factor behind the shortfall was value-added tax. Value-added tax came to 79.2 trillion won, 8.8 trillion won (‑10.0%) less than the 88 trillion won in the main budget. Corporate tax also decreased to 84.6 trillion won, down 3.9 trillion won (‑4.4%) from the budgeted 88.5 trillion won. While corporate performance improved compared with the previous year, it fell short of expectations at the time the budget was drawn up. It is interpreted that the recovery, which was concentrated in a few sectors such as semiconductors, was not sufficient to translate into a broad expansion of the overall corporate tax base. The Transportation, Energy and Environment Tax also declined to 13.2 trillion won, 1.9 trillion won (‑12.6%) below the 15.1 trillion won in the budget, reflecting weaker fuel consumption.

On the other hand, some tax items exceeded the budget and partially offset the decline. Inheritance and gift tax amounted to 16.5 trillion won, an increase of 3.7 trillion won (+28.9%) from the 12.8 trillion won in the main budget. This is attributed to factors such as population aging, increased asset transfers, and changes in the assessed value of real estate and financial assets. Earned income tax also rose to 68.4 trillion won, 3.7 trillion won (+5.7%) higher than the 64.7 trillion won in the budget, as the increase in the number of regular employees and rising wages translated into higher tax revenue. In addition, the Special Tax for Rural Development reached 9.2 trillion won, up 1.8 trillion won (+24.2%) from the 7.4 trillion won in the budget.

Looking at income tax as a whole, it totaled 130.5 trillion won, an increase of 2.5 trillion won (+2.0%) compared with the 128 trillion won in the main budget. In detail, earned income tax increased, but comprehensive income tax fell to 21.3 trillion won, 1.3 trillion won below the 22.6 trillion won in the budget. Capital gains tax amounted to 19.9 trillion won, increasing by only 700 billion won compared with the 20.6 trillion won in the main budget.

Among other tax items, customs duties came to 7.6 trillion won (down 800 billion won from the budget), education tax to 5.7 trillion won (down 300 billion won), securities transaction tax to 3.4 trillion won (down 400 billion won), individual consumption tax to 8.5 trillion won (down 1.2 trillion won), and stamp tax to 800 billion won (down 100 billion won), showing declines across the board in tax categories sensitive to economic conditions.

Meanwhile, compared with the supplementary budget, the revenue trend appears more stable. Reflecting the deterioration in tax collection conditions last year, the government lowered its national tax revenue target to 372.1 trillion won, and the actual settlement exceeded this by 1.8 trillion won. While there was a tax revenue shortfall relative to the main budget, revenue returned to within the planned range when measured against the post-supplementary budget baseline.

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