Ministry of Economy and Finance Announces 'August National Tax Revenue Status'
Corporate and Income Taxes Increase, Transportation and Securities Transaction Taxes Decrease
[Asia Economy Sejong=Reporter Kwon Haeyoung] Tax revenue amounted to 289 trillion won through August this year. This is an increase of 41 trillion won compared to one year ago. Corporate tax revenue surged significantly due to improved corporate earnings last year and in the first half of this year, while income tax and value-added tax also saw substantial increases. On the other hand, securities transaction tax sharply declined due to financial market contraction caused by monetary tightening in the United States. With growing concerns over an economic recession next year, it is expected that this tax revenue boom will be difficult to sustain in the coming year.
On the 29th, the Ministry of Economy and Finance announced the 'August National Tax Revenue Status' containing these details.
The cumulative national tax revenue from January to August this year was 289.3 trillion won, a 16.5% (41 trillion won) increase compared to the same period last year. By tax category, corporate tax revenue from January to August was 82.5 trillion won, a sharp increase of 50.4% compared to the previous year. Based on KOSPI December fiscal year-end corporations, operating profit last year rose 58.2% year-on-year to 106.8 trillion won, and operating profit in the first half of this year increased 7.4% year-on-year to 54.1 trillion won, leading to the rise in corporate tax.
Income tax revenue was recorded at 91.1 trillion won, up 15% (11.9 trillion won) year-on-year, due to an increase in the number of employed persons following economic and employment recovery. The number of regular employees averaged 15.55 million per month from December 2021 to July this year, a 5.5% increase compared to 14.74 million in the same period last year. Value-added tax rose 7.7% (4.2 trillion won) during the same period to 58.3 trillion won, reflecting increased consumption and imports.
Conversely, transportation, energy, and environmental taxes fell sharply by 33.6% (3.9 trillion won) to 7.7 trillion won due to the temporary reduction of fuel tax. Securities transaction tax also decreased by 35.9% (2.6 trillion won) to 4.7 trillion won amid financial market contraction.
The tax revenue progress rate through August stands at 72.9%. This means that this portion of the annual national tax revenue forecast of 396.6498 trillion won (based on the second supplementary budget) has been collected so far. This is 1.2 percentage points higher than the average progress rate over the past five years.
However, the Ministry of Economy and Finance anticipates that national tax revenue next year will increase by only 1% to 400.457 trillion won compared to this year, due to high-intensity monetary tightening centered on the U.S., concerns over a global economic recession, and contraction in asset markets such as real estate and stocks.
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