Gyeonggi-do Collects 15.7 Trillion Won in Provincial Taxes... Sharp Decline in Housing Sale Tax Revenue

Gyeonggi Provincial Government Gwanggyo New Office Building

[Asia Economy (Suwon) = Reporter Lee Young-gyu] It has been revealed that Gyeonggi Province collected a total of 15.7369 trillion won in provincial taxes last year. This amount exceeded the initial target (15.5264 trillion won) by 210.5 billion won.

According to the province on the 5th, the tax collection performance by category last year was acquisition tax 8.7555 trillion won (55.6%), local consumption tax 3.4037 trillion won (21.6%), local education tax 2.1932 trillion won (13.9%), and leisure tax 437.5 billion won (2.8%).

Unlike the previous year, when acquisition tax revenue increased significantly due to increased transactions of substitute real estate such as commercial buildings and land, as well as rising housing prices, last year’s collection was reduced by 282.7 billion won compared to the target amount (9.0382 trillion won) due to the impact of high inflation and high interest rates.

Tax revenue from real estate (housing, buildings, land) sales (transfer for consideration) decreased by 1.8 trillion won compared to the previous year. In particular, housing-related revenue sharply dropped from 1.46 trillion won (13.4%) collected last year to 518.1 billion won (5.9%) as both transaction volume and transaction value declined simultaneously.

Earlier, in response to the sharp decline in real estate transactions last year, the province reduced its tax collection target from the initial 17.1446 trillion won to 15.5264 trillion won, a decrease of 1.6182 trillion won.

Local consumption tax and leisure tax increased by 1.066 trillion won compared to the previous year as private consumption and leisure activities, which had been depressed due to COVID-19, recovered.

Choi Won-sam, head of the provincial tax administration division, said, "We thank the residents who faithfully paid their taxes despite the difficult economic situation, and we will ensure that these valuable resources are used promptly where needed." He emphasized, "Since acquisition tax fluctuates greatly depending on government real estate policies, a stable revenue structure is essential. Therefore, we will actively promote tax reforms that transfer a certain percentage of national income and consumption taxes to provincial taxes and increase autonomous revenue sources."

Meanwhile, the province plans to continuously propose to the central government measures such as raising the local consumption tax rate on real estate (from 25.3% to 35%) and introducing a leisure tax on sports promotion lottery tickets (such as Sports Toto) to discover new revenue sources.