Last Year, Unused Budget Approached 46 Trillion Won... Increased by 32 Trillion Won Compared to Previous Year

Ministry of Economy and Finance Announces 2023 Fiscal Year National Tax Revenue Performance

The government’s unused budget from last year approached 46 trillion won. The amount of unused funds surged by 32 trillion won compared to the previous year. The unused amount sharply increased as last year’s tax revenue shortfall reached a record high of 56.4 trillion won.

According to the ‘2023 Fiscal Year Total Revenue and Total Expenditure Closing Results’ announced by the Ministry of Economy and Finance on the 8th, the scale of unused budget last year was recorded at 45.7 trillion won. The unused amount is the amount remaining after subtracting total expenditures and carryover amounts from the budget. Simply put, it refers to the amount of the budget that was not fully spent. The scale of unused funds increased by 32.8 trillion won compared to the previous year (12.9 trillion won).

The Ministry of Economy and Finance emphasized that the so-called ‘practical unused amount’ is only 10.8 trillion won. Practical unused funds are the total amount after summing unused amounts in individual accounts and then excluding changes in revenue conditions and internal transactions. It explained that local allocation tax and funds, which inevitably decrease in line with the decline in tax revenue, are covered by the integrated fiscal stabilization fund of local governments and education offices, and these are recorded as unused funds.

An official from the Ministry of Economy and Finance said, “Excluding local allocation tax and fund adjustment (18.6 trillion won) and internal transactions (16.4 trillion won), the practical unused amount is only 10.8 trillion won,” adding, “The practical unused rate compared to the current budget amount is only 2.0%.” He continued, “This occurred due to last year’s unused contingency funds and reduced project expenditure needs, which is similar to past levels.” It was explained that the practical unused rates in 2013 and 2014, when tax revenue shortages occurred, were 2.6% and 2.1%, respectively.

Last year, total expenditures were reduced by 69.3 trillion won from the current budget amount of 540 trillion won to 490.4 trillion won. General account expenditures were 405.9 trillion won, down 79.2 trillion won from the previous year. The world surplus was 2.7 trillion won, with 36.4 billion won from the general account and 2.6 trillion won from the special account, decreasing by 6.5 trillion won compared to the previous year (9.1 trillion won).

Last year, total revenue, combining national tax revenue and non-tax revenue, was tallied at 497 trillion won. National tax revenue was 344.1 trillion won, which was 56.4 trillion won less than the original budget forecast (400.5 trillion won). However, it was 2.7 trillion won more than the government’s final forecast announced in the tax revenue re-estimate in September last year (341.4 trillion won). It was 51.9 trillion won less than the previous year.

The fact that tax revenue was more than 50 trillion won less than the government’s prediction was largely due to worsening domestic and international economic conditions, which negatively affected corporate performance and asset market contraction. By tax category, corporate tax revenue recorded 80.4195 trillion won, which was 23.1509 trillion won less than last year (103.5704 trillion won). It was 24.5774 trillion won less than the original budget.

Income tax collection was 12.9156 trillion won less than the previous year. The impact of the real estate and other asset market downturn caused capital gains tax to decrease by 14.6773 trillion won and comprehensive income tax to drop by 25.0021 trillion won. Value-added tax decreased by 7.8517 trillion won due to reduced import amounts. Securities transaction tax also decreased by 222.6 billion won, and comprehensive real estate tax fell by 2.2023 trillion won due to the decline in official land prices. Value-added tax also decreased by 7.8517 trillion won.

Kim Yunsang, the 2nd Vice Minister of the Ministry of Economy and Finance, stated, “Despite the decrease in national tax revenue last year, the government made full use of fund surplus resources and world surplus funds to steadily support the revitalization of the livelihood economy.”