Ministry of Economy and Finance Publishes 'Monthly Fiscal Trends and Issues April Edition'
National Tax Revenue 70 Trillion KRW and Total Expenditure 121 Trillion KRW in Jan-Feb This Year... Managed Fiscal Balance -20 Trillion KRW
[Asia Economy Sejong=Reporter Kwon Haeyoung] National tax revenue increased by more than 12 trillion won compared to a year ago until February this year. This is due to an increase in income tax from employment recovery and an increase in value-added tax from increased consumption. Although tax revenue increased, total expenditure rose even more due to the implementation of supplementary budgets (supplementary budgets) to support small business owners and respond to COVID-19, as well as active fiscal spending to support economic recovery, resulting in the fiscal balance, which had recorded a 'brief surplus,' turning into a deficit from the beginning of the year.
According to the "Monthly Fiscal Trends and Issues April 2022" released by the Ministry of Economy and Finance on the 14th, national tax revenue in February this year was 20.3 trillion won, an increase of 1.4 trillion won compared to a year ago. Accordingly, cumulative national tax revenue reached 70 trillion won, an increase of 12.2 trillion won compared to the same period last year. The national tax revenue progress rate was 20.4%, up 3.6 percentage points from last year.
Until February this year, income tax increased by 6.7 trillion won, corporate tax by 1.2 trillion won, and value-added tax by 3.6 trillion won compared to a year ago. Income tax increased mainly due to earned income tax, and deferred tax payments were made in February. The increase in value-added tax due to consumption recovery also contributed to the increase in revenue.
Total revenue from January to February, including national tax revenue, non-tax revenue, and fund revenue, recorded 106.1 trillion won. Although national tax revenue increased, expenditure also rose significantly, turning the integrated fiscal balance, which recorded a surplus in January, into a deficit.
Total expenditure in February was 64.9 trillion won, and total expenditure from January to February this year was 121.2 trillion won. This is an increase of 11.4 trillion won compared to a year ago. The total expenditure progress rate was 19.4%, the highest level in the past 10 years. This was the result of early budget execution to support small business owners' loss compensation and quarantine support payments following the supplementary budget passed in February, as well as COVID-19 response and economic recovery support.
Accordingly, the integrated fiscal balance (government total revenue - total expenditure) recorded a deficit of 24.1 trillion won in February, showing a deficit of 15.1 trillion won until February. It switched from a brief surplus in January to a deficit. The managed fiscal balance, which excludes the four major social security fund balances from the integrated fiscal balance to show the actual state of national finances, recorded a deficit of 26.6 trillion won in February alone, resulting in a deficit of 20 trillion won by the end of February this year.
Central government debt was recorded at 974.5 trillion won as of the end of February. The government's forecast, including the first supplementary budget this year, is 1,044.6 trillion won by the end of the year.
An Do-geol, the 2nd Vice Minister of the Ministry of Economy and Finance, stated, "Future fiscal spending will focus on protecting vulnerable groups and supporting small business owners' damage recovery projects, considering the difficulties of the low-income economy due to inflationary pressures."
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