[National Tax Revenue (PG) (Photo = Yonhap News)]
It is expected that this year’s national tax revenue will be 2.2 trillion won less than the forecast made during the supplementary budget planning.
Despite the revenue adjustment in June which reduced the main budget by 10.3 trillion won, a further revenue shortfall has occurred, increasing the overall shortfall to approximately 12 trillion won.
According to the results of re-estimation of tax revenues announced by the Ministry of Economy and Finance today (25th), this year’s national tax revenue is projected to be 369.9 trillion won.
The government reduced the initial revenue budget by 10.3 trillion won in June and lowered it again by 2.2 trillion won within just three months. As a result, the revenue shortfall forecast for this year has expanded to 12.5 trillion won.
The Ministry of Economy and Finance explained that due to factors such as a decrease in the exchange rate, VAT and customs duties decreased, and the extension of the flexible tax rate reduction on fuel and decreased fuel consumption resulted in 1 trillion won less revenue.
Additionally, the expansion of income tax refunds for small-scale personal service providers like delivery riders was about 200 billion won more than the government anticipated.
However, compared to last year’s figures, this year’s national tax revenue is expected to increase by 33.4 trillion won. Last year, due to the boom in overseas stocks and expanded corporate bonuses, income tax increased by 10.9 trillion won compared to the previous year, and the corporate tax also increased by 21.1 trillion won due to improved corporate performance last year.
The error rate between the revised additional budget and the forecast was 0.6%, while the error rate compared to the original budget was 3.3%. Man-hee Cho, policy director of comprehensive tax at the Ministry of Strategy and Finance, stated, “The tax error between 2021 and 2024 was large, but excluding those figures, the average error rate over the previous 10 years was 4.8%,” assessing that “the error rate this time is quite low.”
In the past, the Ministry of Strategy and Finance recorded the largest ever tax error rate of 21.7% compared to the original budget in 2021, followed by 15.3% in 2022, 14.1% in 2023, and 8.4% last year.
The Ministry of Economy and Finance explained that the 2.2 trillion won shortfall in tax revenue could be addressed with unused budgets (government unspent funds) amounting to 6-7 trillion won.
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