Despite COVID-19, Last Year’s National Tax, Pension, and Insurance Burden Increased... 10.19 Million Won Per Person

0.8% Increase from 2019... Total National Burden Amount 528 Trillion KRW and National Burden Rate 27.4%

[Sejong=Asia Economy Reporter Moon Chaeseok] Despite the economic downturn caused by the COVID-19 crisis last year, the amount of taxes, pensions, and insurance premiums paid by the public was higher than the previous year. The amount paid per person was 10.19 million KRW.

On the 7th, Choo Kyung-ho, a member of the People Power Party on the National Assembly's Planning and Finance Committee, analyzed data on national taxes, local taxes (provisional), and social security contributions received from various institutions. According to the analysis, the national burden amount last year was 527.7 trillion KRW, an increase of 0.8% from 523.4 trillion KRW in 2019. The national burden amount is calculated by combining the total tax amount and social security contributions paid by the public to the country. The total tax amount consists of national taxes and local taxes, while social security contributions include contributions and premiums for the four major public pensions (National Pension, Government Employees Pension, Military Pension, Private School Teachers Pension) and insurance (Health Insurance, Employment Insurance, Industrial Accident Insurance, Long-term Care Insurance for the Elderly).

Last year, the total tax amount was 377.7 trillion KRW, with national taxes at 285.5 trillion KRW and local taxes at 92.2 trillion KRW. Due to the impact of the COVID-19 crisis, the total tax amount last year decreased by 1.6% compared to 384 trillion KRW in 2019. On the other hand, social security contributions increased by 7.6% to 150 trillion KRW from 139.4 trillion KRW the previous year. Health Insurance was the largest at 62.5 trillion KRW, followed by the National Pension at 51.2 trillion KRW. The national burden rate, which is the ratio of the national burden amount to the Gross Domestic Product (GDP), rose by 0.1 percentage points to 27.4% from 27.3% the previous year.

The 'per capita national burden amount,' calculated by dividing the total national burden amount by the population last year (51.781 million) according to Statistics Korea's future population projections, was 10.19 million KRW, an increase of 0.7% from 10.12 million KRW the previous year. The per capita tax burden was 7.29 million KRW, and the per capita social security contribution burden was 2.90 million KRW.

Choo analyzed the trend of the national burden amount up to 2024 based on the 2020-2024 National Fiscal Operation Plan, Medium-term Local Finance Plan, the National Assembly Budget Office's long-term financial outlook for the four major public pensions, and forecasts related to pensions and insurance from various institutions. The total national burden amount, national burden rate, and per capita national burden amount are all expected to continue increasing.

The total national burden amount is projected to increase from 527.7 trillion KRW last year to 553.7 trillion KRW this year and 580.5 trillion KRW next year. It is expected to surpass 600 trillion KRW for the first time in 2023 at 608.6 trillion KRW and reach 632 trillion KRW in 2024. The national burden rate is also predicted to rise from 27.4% last year to 27.6% this year, 27.8% next year, and 28.1% in 2023. However, it is expected to decrease slightly to 28.0% in 2024. The per capita national burden amount is estimated to increase from 10.19 million KRW last year to 10.68 million KRW this year, 11.20 million KRW next year, 11.73 million KRW in 2023, and 12.18 million KRW in 2024.

Choo pointed out, "In addition to the rapidly increasing national debt under the current government, the tax and quasi-tax burden on all citizens is also rising quickly," adding, "The future young generation is likely to struggle under the weight of debt and taxes."