Tax Revenue Shortfall of 51 Trillion Won by September... Corporate Tax Alone Decreased by 24 Trillion Won

National tax revenue until September this year has decreased by nearly 51 trillion won compared to the same period last year. The scale of tax revenue shortfall continues to expand due to poor corporate performance and a slowdown in real estate transactions.

According to the Ministry of Economy and Finance on the 31st, national tax revenue from January to September this year amounted to 266.6 trillion won, down 50.9 trillion won from the same period last year.

The progress rate of national tax revenue against the budget for September was only 66.6%. This is significantly lower than the progress rate compared to last September's performance (80.2%) and the average performance over the past five years (79.0%). Even if the same level of taxes as last year is collected during the remaining period of this year, tax revenue is estimated to be 344.9 trillion won, which is 55.6 trillion won less than the revenue budget (400.5 trillion won). However, it is expected to be 3.5 trillion won higher than the government's revised tax revenue estimate announced last month (341.4 trillion won).

The sharp decline in national tax revenue this year is due to the rapidly deteriorating domestic and international economic conditions from the fourth quarter of last year through the first half of this year. The prolonged high interest rates have led to a contraction in the asset market, significantly reducing capital gains tax and value-added tax. Corporate tax revenue also plummeted due to sluggish exports caused by the semiconductor industry downturn.

By major tax categories, corporate tax collected from January to September was 71.9 trillion won. This is 23.8 trillion won (24.9%) less than the same period last year. As the poor operating profits of companies last year continued into the first half of this year, corporate tax decreased by 3.6 trillion won in September alone compared to a year earlier due to reduced interim tax payments. Choi Jin-gyu, head of the Tax Analysis Division at the Ministry of Economy and Finance, said, "However, the interim corporate tax payments will effectively conclude this month, and tax revenue from installment payments by small and medium-sized enterprises in October will be minimal, so there will be no further decrease." He added, "From next month, the decline will lessen, and tax revenue is expected to proceed according to the revised forecast."

Income tax revenue was recorded at 84.6 trillion won. Capital gains tax decreased due to sluggish real estate transactions, down 14.2 trillion won compared to the same period last year. According to the Ministry of Economy and Finance, from November last year to July this year, housing sales volume decreased by 18.9% compared to the same period a year earlier, and pure land sales volume sharply dropped by 34.6% during the same period.

Value-added tax revenue until September was 54.9 trillion won, down 6.2 trillion won (10.2%). The Ministry of Economy and Finance analyzed that this was due to decreased imports and the base effect of tax administration support. Inheritance and gift tax payments amounted to 11.1 trillion won, down 900 billion won (7.3%) from a year earlier. Additionally, the transportation energy environment tax decreased by 500 billion won (5.6%) to 8.2 trillion won due to the temporary reduction of fuel tax, and comprehensive real estate tax decreased by 300 billion won to 1.8 trillion won. Education tax increased by 400 billion won to 3.9 trillion won.

The government expects tax revenue for the remaining period of this year to align with the revised forecast. Choi said, "There will be tax revenue decreases in value-added tax in October and comprehensive income tax in November," but added, "Regarding how much more it will decrease and whether tax revenue will improve in September, at this point, there is no significant cause for concern."