Impact of Corporate Tax and Comprehensive Real Estate Holding Tax Reduction... National Tax Revenue Collected 10 Trillion Won Less in First Half of This Year

Ministry of Economy and Finance June National Tax Revenue Status
Tax Revenue Falls Below Half of Budget

National tax revenue collected up to June this year was 10 trillion won less than the same period last year. This decline is attributed to reduced corporate tax and comprehensive real estate tax installment payments due to last year's economic downturn and real estate market slump. Tax revenue for the first half of the year reached only 45.9% of the government's projected national tax revenue forecast for this year (367.3 trillion won), falling short of half.

The Ministry of Economy and Finance announced the "National Tax Revenue Status for June 2024" on the 31st, containing these details.

National tax revenue recorded from January to June this year was 168.6 trillion won, which is 10 trillion won less than the same period last year. The progress rate compared to this year's national tax revenue budget (367.3 trillion won) stands at 45.9%. This means that tax revenue collected up to the first half of the year is below half of the budget. However, this is a slight improvement compared to last year's record worst tax shortfall (44.6%).

The decrease in national tax revenue was influenced by a decline in corporate tax due to poor corporate performance and a reduction in comprehensive real estate tax installment payments. Corporate tax collected on a cumulative basis from January to June was 30.7 trillion won, a sharp decrease of 16.1 trillion won (34.4%) compared to one year ago.

The progress rate of corporate tax against the budget (77.7 trillion won) was only 39.5%. This is not only lower than the same period last year (58.1%) but also significantly below the recent 5-year average (57.9%).

Comprehensive real estate tax collected was 1.2 trillion won, down 400 billion won (27.4%) from the same period last year due to a decrease in installment payments of last year's assessed tax amount. Yoon Su-hyun, head of the Tax Analysis Division at the Ministry of Economy and Finance, explained, "Last year, the standard market price for real estate decreased and the comprehensive real estate tax was eased, resulting in reduced tax revenue and consequently lower installment payments. However, the increase in housing transactions starting in April is expected to be reflected in capital gains tax revenue from July onward, with a three-month lag."

Securities transaction tax revenue amounted to 2.7 trillion won, a decrease of 300 billion won compared to the same period last year, despite an increase in stock trading volume, due to the expanded impact of the tax rate reduction. While the government postponed the introduction of the financial investment income tax, it decided to lower the securities transaction tax rate from 0.2% last year to 0.18% this year. Customs duties stood at 3.3 trillion won, down 200 billion won due to decreased imports.

On the other hand, income tax and value-added tax, which are among the three major tax categories along with corporate tax, showed increased revenue. Income tax revenue was positively influenced by increased interest income tax due to high interest rates and increased earned income tax from a rise in the number of employed persons. However, comprehensive income tax slightly decreased due to reduced payments from taxpayers filing accurate returns, resulting in a total increase of 200 billion won compared to the same period last year, reaching 58.1 trillion won.

Value-added tax maintained an increasing trend in payment performance due to increased consumption and reduced refunds, collecting 41.3 trillion won, up 5.6 trillion won from one year ago.