Last Year's Tax Revenue 395.9 Trillion Won... Lowest Tax Revenue Error Rate in 21 Years

Tax Revenue Increases by 51.9 Trillion Won... Tax Revenue Error Rate at 0.2%

[Asia Economy Sejong=Reporter Lee Jun-hyung] It was revealed that tax revenue collected last year increased by nearly 52 trillion won compared to the previous year. This was the result of a significant increase in domestic taxes such as income tax and corporate tax. The tax revenue error rate recorded its lowest level in 21 years at 0.2%.

According to the Ministry of Economy and Finance on the 30th, last year's national tax revenue was tentatively estimated at 395.9 trillion won, an increase of 51.9 trillion won compared to the previous year. The tax revenue error rate recorded its lowest level in 21 years. The estimation error compared to the second supplementary budget (396.6 trillion won) was 700 billion won, and the tax revenue error rate was 0.2%. This is the lowest error rate since 2001, when it recorded 0.1%.

Compared to the government's forecast through last year's main budget (343.4 trillion won), 52.5 trillion won more was collected. Earlier, when the government prepared the second supplementary budget in May last year, it revised the revenue forecast to 396.6 trillion won, about 53.3 trillion won more than the main budget. Regarding this, a Ministry of Economy and Finance official explained, "It should be seen that the government revised the national tax revenue forecast through the supplementary budget," and "Fiscal and fund management was also conducted based on the second supplementary budget."

The reason nearly 52 trillion won more tax was collected in one year is due to a significant increase in domestic taxes. In particular, corporate tax (103.6 trillion won) increased by 33.2 trillion won compared to the previous year. This reflects the improvement in corporate performance in 2021 compared to 2020, when COVID-19 spread. In fact, the operating profit of KOSPI companies with December fiscal year-end increased by 58.2%, from 67.5 trillion won in 2020 to 106.8 trillion won in 2021.

Income tax amounted to 128.7 trillion won, an increase of 14.6 trillion won compared to the previous year. Specifically, capital gains tax decreased by 4.5 trillion won, but comprehensive income tax and earned income tax increased by 7.9 trillion won and 10.2 trillion won respectively. Value-added tax was 81.6 trillion won, 10.4 trillion won more than the previous year. This is analyzed to be influenced by last year's price increases and increased consumption following the lifting of social distancing measures.

In addition, the transportation energy environment tax was 11.1 trillion won, down 5.5 trillion won. The shrinkage of transportation tax was because the government raised the fuel tax reduction rate to the legal maximum of 37% last year. Last year's comprehensive real estate tax was 6.8 trillion won, down 700 billion won from the previous year. The Ministry of Economy and Finance explained that although the comprehensive real estate tax notice amount last year was 7.5 trillion won, down 1.1 trillion won from the previous year (8.6 trillion won), the installment payments of the 2021 comprehensive real estate tax increased.

This year, corporate tax and income tax are expected to decrease compared to last year. This is because the government recently significantly increased the tax credit rate for national strategic technologies such as semiconductors, and the 'employment cold wave' is intensifying mainly among the youth. If the real estate 'transaction cliff' continues, capital gains tax may also decrease.

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is greeting participants at the Emergency Economic Ministers' Meeting held on the 26th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@