Semiconductors and the U.S. Stock Market Drive 37 Trillion Won More in Tax Revenue Last Year

February Issue of the Ministry of Planning and Budget’s Monthly Public Finance Review Released on the 12th
Corporate Tax Up 22 Trillion Won and Income Tax Up 13 Trillion Won from a Year Earlier
Deficit in Government Finances on a Cumulative Basis Through December to Be Disclosed in April

Last year, national tax revenue increased by more than 37 trillion won from a year earlier, driven by the semiconductor supercycle and the boom in the U.S. stock market.

According to the February issue of the Monthly Public Finance Review published by the Ministry of Planning and Budget on the 12th, total national tax revenue for last year came to 373.9 trillion won. This is an increase of 37.4 trillion won from a year earlier.

The tax item that contributed the most to the increase in national tax revenue was corporate tax. Thanks to improved corporate earnings, including the semiconductor supercycle, corporate tax revenue rose by 22.1 trillion won year-on-year.

Next, as the number of employed people increased and wages rose, labor income tax revenue grew, and capital gains tax revenue also increased due to the boom in overseas stock markets. As a result, total income tax revenue increased by 13 trillion won compared with the previous year.

However, value-added tax revenue decreased by 3.1 trillion won over the same period, as export growth led to higher refunds. Securities transaction tax revenue also fell by 1.3 trillion won due to a tax rate cut.

Nontax revenue from sources such as fees and fines amounted to 32.1 trillion won, up 2.5 trillion won from a year earlier. The increase of 4.5 trillion won in the Bank of Korea surplus played a major role.

As of the end of last year, finalized figures for fiscal indicators such as total revenue, total expenditure, and national debt are scheduled to be released in early April after the closing of the accounts at the end of this month.

This year, the government’s finances are expected to record a deficit of more than 100 trillion won. As of the end of November last year, the consolidated fiscal balance, which is total revenue minus total expenditure, showed a deficit of 43.3 trillion won. Within this, the managed fiscal balance, which reflects the government’s underlying fiscal position, recorded a deficit of 89.6 trillion won. On a comparable basis, this is the third-largest deficit on record, following 2020 (98.3 trillion won) and 2022 (98 trillion won) during the COVID-19 period.

Meanwhile, the volume of Treasury bond issuance in January was 17.9 trillion won, equivalent to 7.9% of the annual total issuance limit. Treasury bond yields rose from the previous month as expectations for interest rate cuts weakened and long-term interest rates surged due to concerns over Japan’s public finances. The three-year Treasury bond yield stood at 3.138%, and the 10-year yield at 3.607%. Foreign investors’ holdings of Treasury bonds amounted to 303.1 trillion won, up 5.8 trillion won from a month earlier.

This content was produced with the assistance of AI translation services.