Status of National Tax Revenue in January
Driven by Increases in VAT and Income Tax
Special Rural Development Tax Up 113.3% Amid KOSPI Bull Market
National tax revenues collected in January increased by KRW 6.2 trillion compared to a year earlier. This marks a positive start to the year, with improved tax revenue performance over last year. The increase is attributed to higher corporate tax receipts resulting from the semiconductor boom, and optimism for a recovery in domestic demand is brightening this year’s overall tax outlook.
According to the “Status of National Tax Revenue for January 2026” released by the Ministry of Economy and Finance on the 27th, national tax revenues collected in January amounted to KRW 52.9 trillion. This is an increase of KRW 6.2 trillion (13.4%) from KRW 46.6 trillion during the same period last year.
The tax revenue progress rate compared to the government’s budget plan stood at 13.5%. This is a better start than last January, when the progress rate was only 12.19%. It is also an improvement over the recent five-year average (12.5%). This indicates that, compared to the government’s plans, tax collections are proceeding more smoothly than in either the recent five-year average (which included tax revenue shortfalls from 2023 to 2025) or last year.
By tax item, value-added tax (VAT) saw the largest increase. VAT revenue was recorded at KRW 26.1 trillion, up by KRW 3.8 trillion (17.3%), mainly due to decreased refunds and increased taxable amounts.
Corporate tax revenue amounted to KRW 2.7 trillion, the same as in January last year. Corporate tax collected in January mainly reflects estimated payments from companies with December fiscal-year ends (including withholding tax as of January 12). Due to lackluster performance from export-oriented companies such as those in the semiconductor sector last year, estimated payments were lower, resulting in collections remaining at last year’s level. Final settlements are concentrated in March.
Income tax, one of the three major tax categories along with corporate tax and VAT, increased by KRW 1.5 trillion (11.1%) to KRW 15.1 trillion. The Ministry of Economy and Finance explained that this was due to increased employment driving up earned income tax and a rise in real estate transactions boosting capital gains tax.
Due to the partial rollback of lower fuel tax rates, the transportation, energy, and environment tax rose by KRW 200 billion (17.9%) to KRW 1.2 trillion, while individual consumption tax (KRW 1.1 trillion) increased by KRW 100 billion (7.1%). Inheritance and gift tax (KRW 1.1 trillion), customs duties (KRW 600 billion), and comprehensive real estate holding tax (KRW 100 billion) remained at the same level as last year.
Securities transaction tax revenues reached KRW 400 billion, an increase of KRW 200 billion (51.7%), due to increased trading volume on KOSDAQ. The special rural development tax, which is applied to KOSPI trading volume, also increased by KRW 300 billion (113.3%) to KRW 600 billion over the same period.
The tax revenue outlook remains positive going forward. The government’s projected economic growth rate has also risen significantly compared to when this year’s revenue budget was drafted. In the “2026 Economic Growth Strategy” announced last month, the government raised its annual growth rate projection for this year to 2.0%, up from the previous estimate of 1.8%. The Bank of Korea also presented a 2.0% annual growth rate forecast at its economic outlook briefing the previous day.
There are also projections that there will not be a large-scale tax revenue shortfall like those experienced during the Yoon Suk-yeol administration. A Ministry of Economy and Finance official stated, “Although there are many upward factors for the year as a whole, we plan to closely monitor key tax items while keeping an eye on downside risks to the economy stemming from uncertainties in customs policy.”
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