National Tax Revenue Increased by 700 Billion Won in February Compared to Last Year

Income Tax Revenue Falls Short by 900 Billion Won

In February of this year, national tax revenue increased by 700 billion KRW compared to the same period last year. This was due to an increase in value-added tax revenue and securities transaction tax, although income tax decreased due to a reduction in corporate performance bonuses.

According to the national tax revenue status announced by the Ministry of Economy and Finance on the 29th, national tax revenue in February this year was 12.1 trillion KRW, an increase of 700 billion KRW compared to the same period last year. The tax revenue progress rate for February against this year's national tax revenue budget (367.3 trillion KRW) is 15.8%. This is the same level as last year but below the recent 5-year average (16.6%).

By tax category, value-added tax led the overall increase in national tax revenue with an increase of 1.4 trillion KRW. Securities transaction tax increased by 100 billion KRW due to factors such as the rise in trading volume of listed stocks. Last month, the total securities trading volume on the KOSPI and KOSDAQ was 426.2 trillion KRW, an increase of more than 62% compared to the same month last year (262.8 trillion KRW). Corporate tax increased by 200 billion KRW due to an increase in withholding income such as interest income.

Income tax, one of the three major tax categories along with value-added tax and corporate tax, decreased by 900 billion KRW. Despite the increase in interest income due to rising interest rates, earned income tax decreased due to a reduction in performance bonuses paid by major companies. Customs duties decreased by 100 billion KRW due to a decline in imports. During this period, import value was 48.11 billion USD, down 13.1% compared to one year ago.

The government projected national tax revenue at 367.3 trillion KRW in this year's budget. However, concerns about a decline in tax revenue are spreading as recent tax reduction policies have been announced one after another. Recently, as part of the 'Corporate Value-Up Support Plan' to increase corporate value, the government is promoting policies that provide partial corporate tax reduction benefits for companies' treasury stock cancellations or increases in shareholder dividends. At the end of last year and the beginning of this year, various tax reduction pledges were announced ahead of the general election, including the abolition of financial investment income tax, easing of stock transfer tax, and tax exemption for Individual Savings Accounts (ISA).