National Tax Revenue Increased by 2.9 Trillion KRW in Jan-Feb... Income Tax Drives Growth Amid Rising Bonuses

National Tax Revenue Reaches 61 Trillion KRW in January and February
Income and Corporate Taxes Rise, Value-Added Tax Declines
February Revenue Totals 14.3 Trillion KRW, Up 18.6%

National tax revenue increased by 2.9 trillion KRW in January and February this year. Following January, last month also saw a significant rise in earned income tax due to expanded performance bonus payments, and capital gains tax increased with the rise in real estate transaction volume, resulting in an additional 2.7 trillion KRW collected from income tax items alone. Corporate tax also increased by 700 billion KRW due to growth in interest and dividend income.

According to the "National Tax Revenue Status for February 2025" announced by the Ministry of Economy and Finance on the 31st, national tax revenue for January and February this year totaled 61 trillion KRW, an increase of 2.9 trillion KRW (5.1%) compared to the same period last year. As of February this year, the budget execution rate was 15.9%, lower than 2024 (17.2%) and the recent 5-year average (16.8%). The execution rates for the same period last year and the recent 5-year average are based on final settlement. The budget execution rates for February 2023 and 2024 were 13.5% and 15.8%, respectively.

The increase in cumulative national tax revenue in February was largely influenced by income tax. Following January, last month also saw an increase in performance bonus payments, leading to a 2.6 trillion KRW rise in earned income tax (18.2 trillion KRW), and with improvements in real estate transactions, capital gains tax (3.1 trillion KRW) increased by 100 billion KRW, resulting in an 11.1% increase of 2.7 trillion KRW in income tax (26.8 trillion KRW) alone.

Value-added tax (16.8 trillion KRW) decreased by 700 billion KRW (4.2%) due to increased refund applications despite growth in imports. On the other hand, corporate tax (4.2 trillion KRW) increased by 700 billion KRW (19.9%) due to growth in corporate interest and dividend income.

Securities transaction tax (600 billion KRW) decreased by 400 billion KRW (41.4%) due to a decline in the trading volume of listed stocks. Transportation, energy, and environment tax (2.1 trillion KRW) increased by 300 billion KRW (13.7%) influenced by partial restoration following the reduction of the fuel tax elasticity rate.

The government stated that although the cumulative execution rate for February is relatively low, the revenue outlook for this year should be monitored. Since there are no major tax filings in January and February, the execution rate does not carry significant meaning, and with corporate tax final filings in March, related performance needs to be reviewed.

Jo Moon-gyun, head of the Tax Analysis Division at the Ministry of Economy and Finance, explained, "It is difficult to make a definitive judgment on the entire revenue collection for this year based solely on tax revenue performance up to February," but added, "Given the worsening economic outlook, the U.S. tariff policy, and expanding domestic and international uncertainties, as well as increased downward risks to tax revenue, it is necessary to monitor corporate tax performance and major tax filings after March."

National tax revenue for February was 14.3 trillion KRW, an increase of 2.3 trillion KRW (18.6%). Major taxes such as income tax and value-added tax increased, and inheritance and gift taxes also rose, continuing the upward trend from the previous month.

Income tax (13.2 trillion KRW) increased by 2 trillion KRW (18.2%) due to expanded performance bonus payments and increased housing transaction volume, which led to rises in earned income tax and capital gains tax. Housing transactions increased by 20.7% (8,000 cases), from 38,000 cases in December 2023 to 46,000 cases in December last year.

Value-added tax (-5.4 trillion KRW) increased by 100 billion KRW (2.0%) due to improvements in imports. Inheritance and gift taxes (1.2 trillion KRW) increased by 300 billion KRW (33.8%) due to a rise in the number of deaths. Securities transaction tax (300 billion KRW) decreased by 300 billion KRW (47.6%) due to a decline in securities trading volume.

Additionally, transportation, energy, and environment tax (1 trillion KRW) increased by 100 billion KRW (9.5%) due to partial restoration of the fuel tax elasticity rate. Customs duties (500 billion KRW) also increased by 100 billion KRW (23.5%).