National Treasury Posts 1.13 Trillion Won Surplus in January Amid Real Estate and Stock Market Boom... Supplementary Budget Resources Piling Up

Income and Securities Transaction Tax Surge Amid Booming Real Estate and Stock Markets
Corporate Tax Expected to Soar in March Thanks to Semiconductor Boom
Government Likely to Use Excess Tax Revenues for Supplementary Budget

In January of this year, the nation’s finances posted a surplus of 1.13 trillion won. An increase in income tax due to the revitalized real estate market and a rise in securities transaction tax fueled by a bullish stock market led to national tax revenues exceeding last year's figures by more than 6 trillion won. In March, corporate tax revenue is expected to surge further, driven by the semiconductor boom, which will likely widen the fiscal surplus. The government, which has announced plans for an extra budget (supplementary budget) to respond to the economic crisis sparked by the Middle East, intends to secure funding as much as possible from excess tax revenues without issuing government bonds.

Yonhap News Agency

According to the March issue of the 'Monthly Fiscal Trends' published by the Ministry of Planning and Budget on March 12, total revenue as of the end of January this year reached 74.7 trillion won, up 8.5 trillion won from a year earlier. The budget execution rate stood at 11.1%. Over the same period, total expenditure was 60.5 trillion won, up by 7.7 trillion won. The execution rate was 8.3%. As a result, the consolidated fiscal balance—total revenue minus total expenditure—recorded a surplus of 14.3 trillion won. Excluding the surplus from social security funds such as the National Pension (3 trillion won), the managed fiscal balance stood at 11.3 trillion won.

Of the total revenue, national tax revenue amounted to 52.9 trillion won, an increase of 6.2 trillion won year-on-year. By tax category, value-added tax rose to 26.1 trillion won, up 3.8 trillion won from the previous year due to decreased refunds and increased import volume. Income tax also increased to 15.1 trillion won, up 1.5 trillion won from a year earlier. The increase was attributed to a rise in the number of employed persons and the payment of year-end bonuses, which led to higher earned income tax, as well as the activation of real estate transactions, which drove up capital gains tax. Securities transaction tax rose by 200 billion won thanks to the buoyant stock market and an increase in KOSDAQ transaction volume. As of December last year, KOSDAQ transaction volume stood at 204.6 trillion won, a sharp increase of 83.8% compared to the previous year. Securities transaction tax for January national tax revenue reflected transaction volume from December.

Non-tax revenue totaled 2.3 trillion won, up 600 billion won from the previous year, while fund revenue reached 19.6 trillion won, an increase of 1.7 trillion won over the same period.

Looking at total expenditure, executed budget spending was 44.8 trillion won and fund expenditure was 15.7 trillion won. The budget execution rate was 6.2%, while the fund execution rate was 1.5%.

The government plans to draw up a supplementary budget to respond to the global oil price surge following the US-Iran war. The funding is likely to come from excess tax revenue. At a cabinet meeting on March 10, President Lee Jaemyung said, "It seems we need to proceed with the supplementary budget as soon as possible," to which Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol responded, "With the semiconductor market improving and the stock market recovering, transaction taxes are also on the rise, so we should be able to do it without issuing government bonds."

Companies are required to file and pay corporate tax by March 31. As Samsung Electronics and SK hynix recorded their highest-ever operating profits last year thanks to the semiconductor supercycle, corporate tax revenue is expected to increase significantly beyond the initial forecast of 86.5 trillion won.

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