Ministry of Economy and Finance, October National Tax Revenue Status
National tax revenue from January to October this year decreased by 11.7 trillion won compared to the same period last year. Due to sluggish corporate tax interim payments and other factors, the speed of national tax collection was the second slowest on record, following last year.
According to the national tax revenue status announced by the Ministry of Economy and Finance on the 29th, national tax revenue from January to October amounted to 293.6 trillion won, down 11.7 trillion won (3.8%) from the same period last year.
The tax collection progress rate against this year's national tax revenue budget was 79.9%, significantly below the average of the past five years (89.0%). The speed of national tax collection was the second slowest on record, following last year (76.2%), which saw the worst tax shortfall in history.
The sharp decline in corporate tax, one of the three major tax items along with value-added tax and income tax, affected the decrease in tax revenue. Corporate tax payments decreased by 17.9 trillion won due to poor corporate performance last year.
The progress rate of corporate tax against the budget is 75.0%. This is not only lower than the recent five-year average (95.5%) but also significantly below the same period last year (94.7%).
Yoon Soo-hyun, head of the Tax Analysis Division at the Ministry of Economy and Finance, explained, "The decrease in corporate tax in October is due to small and medium-sized enterprises extending the interim payment deadline. When the interest rate is higher than the penalty tax for underreporting SME tax amounts, the payment rate drops."
During the same period, income tax revenue was 94.1 trillion won, an increase of 0.2% (2 billion won) compared to the same period last year. Due to high interest rates, interest income tax and earned income tax increased with the rise in the number of employed persons, while comprehensive income tax and capital gains tax decreased. Value-added tax increased by 6.1 trillion won (8.2%) to 80.2 trillion won, due to increased consumption and decreased refunds.
On the other hand, securities transaction tax revenue amounted to only 4.2 trillion won, down 1.2 trillion won (22.4%) from a year earlier. The stock market contraction and reduced trading volume, along with a tax rate cut, influenced this decline. Customs duties (5.7 trillion won) also decreased by 400 billion won (6.0%) due to reduced import volume and the impact of tariff quotas.
In October alone, tax revenue was 38.3 trillion won, down 300 billion won compared to the same month last year. By tax item, corporate tax decreased by 500 billion won due to reduced interim payment installments, and income tax decreased by 200 billion won due to a decline in capital gains tax. Value-added tax increased by 400 billion won due to increased private consumption in the third quarter and improved preliminary filing performance. Inheritance and gift tax increased by 200 billion won, while securities transaction tax decreased by 200 billion won.
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