Ando Geol: "Yoon Administration's Tax Cuts for the Wealthy Cause 97 Trillion Won Revenue Shortfall"

"Completely Revise the Unrealistic Fiscal Management Plan"

Ando Geol, member of the Democratic Party of Korea.

Ando Geol, a member of the Democratic Party of Korea (representing Gwangju Dongnam-eul), strongly criticized the collapse of the tax revenue base caused by the Yoon Suk-yeol administration's tax cuts for the wealthy and the lack of realism in the national fiscal management plan at the plenary session of the National Assembly’s Strategy and Finance Committee on July 1.

Representative Ando pointed out, "Over the past two years, the aggressive tax cuts for the wealthy have caused the tax burden ratio to plummet from 22.1% in 2022 to 17.6% in 2024," adding, "This is lower than the level seven years ago, and the foundation of the nation's tax revenue is being fundamentally shaken."

He further criticized, "The Yoon Suk-yeol administration claimed that tax cuts would spur economic growth and expand tax revenues, but the result has instead been a continued decline in growth rates and repeated tax revenue shortfalls." In fact, last year’s economic growth rate dropped sharply from 4.6% in 2021 to 2.0%. The confirmed tax revenue shortfalls so far have been 56.4 trillion won in 2023, 30.8 trillion won in 2024, and 10.3 trillion won in 2025.

Representative Ando expressed concern, stating, "As the low-growth phase continues, the decrease in major tax revenue items such as business income tax, individual consumption tax, fuel tax, and customs duties will further exacerbate the tax revenue shortfall," and warned, "In a pessimistic scenario, the tax revenue deficit could reach up to 17 trillion won."

He also criticized the government's "2024-2028 National Fiscal Management Plan" announced last September, saying, "It is unrealistic to assume an average annual increase of 1.1% in discretionary spending and to keep the managed fiscal balance within 3% of GDP." According to the plan, the managed fiscal balance as a percentage of GDP was projected at 3.6% for 2024 and 2.9% for 2025, but in reality, it has risen to 4.1% in 2024 and 4.2% in 2025.

Representative Ando emphasized, "The lack of realism in the fiscal management plan stems from the aim to adhere to the fiscal rule of keeping the fiscal deficit within 3% of GDP," and stressed, "The new government must accurately assess the fiscal investments it intends to implement and completely revise the national fiscal management plan."