Gyeonggi-do Faces Sharp Decline in Provincial Tax Revenue Due to Real Estate Transaction Slump... Special Collection Measures Prepared

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province plans to implement special collection measures to increase local tax revenue from next month until the end of this year, as local tax collection has decreased by about 400 billion KRW compared to last year due to a decline in real estate transaction volume.

According to Gyeonggi Province on the 30th, local tax collection amounted to 9.0225 trillion KRW as of the end of July, down 404.6 billion KRW from the same period last year (9.4271 trillion KRW). This is 52.6% of this year's target amount (17.1446 trillion KRW).

In particular, acquisition tax, which accounts for 60% of local tax revenue, decreased by 1.1012 trillion KRW (16.9%) from 6.5236 trillion KRW to 5.4224 trillion KRW.

This is because real estate (housing, land, buildings) transactions in the province from January to July this year sharply dropped by 41.01%, from 365,390 cases last year to 215,531 cases this year. Moreover, housing transactions fell dramatically by 57.08%, from 177,772 cases last year to 76,308 cases.

Accordingly, the province will first conduct a comprehensive investigation based on reference data from related departments such as newly constructed buildings, inherited property, and structural changes to discover hidden tax sources.

Additionally, the province will investigate notification data from the Supreme Court, violations of the Real Name Real Estate Act, and major shareholders (shareholders owning more than half of issued shares and controlling corporate management) by reviewing institutional notification data to impose taxes on omitted amounts.

Furthermore, for tax-exempt or reduced cases whose suspension period expires between October and December, the province will investigate whether the properties were sold or used for other purposes and guide payment for applicable taxable cases.

Besides these measures, the province will operate a comprehensive overdue tax collection period in the second half of the year, focusing on collecting the target amount of 183.2 billion KRW.

Choi Won-sam, head of the provincial tax administration division, emphasized, "Since acquisition tax revenue is expected to continue declining for the time being due to the contraction of real estate transactions, we will strive for more thorough local tax management."