Korea’s tax income shriveled 800 billion won to 189.4 trillion won ($159 billion) as of July from a year ago amid slow economy whereas the growth in government debt accelerated to near 700 trillion won, burdening the government seeking a supersized budget for the second consecutive year in 2020 to prop up the economy.
The finance ministry attributed the decline to a 2.7 trillion won cut in value-added tax revenue caused by a hike in rural consumption tax rate from 11 percent to 15 percent.
Tax collection reached 64.2 percent of annual target as of July, 6.7 percentage point slower compared with a year ago. Based on account settlement, however, it achieved 64.8 percent of the target, falling short by just 0.6 percentage point from a year earlier.
Non-tax income decreased 1.3 trillion won from a year ago to 15.5 trillion won from January to July. Fund revenue grew 4.2 trillion won to 89 trillion won, bringing total revenue to swell by 2 trillion won on year to 293.9 trillion won.
It spent 318.2 trillion won, up by 35.5 trillion won compared with the previous year. Consolidated fiscal balance recorded 24.3 trillion won in deficit. The management budget balance that excludes the four major national funds such as pensions and employment insurance, posted a deficit of 48.2 trillion won.
The fiscal balance in July alone showed a 14.2 trillion won surplus, narrowing the loss in the January-July period compared with the January-June period.
In July alone, tax revenue rose 100 billion won from the previous year to 33.2 trillion won. Corporate tax shrank 200 billion won to 1.7 trillion won due to the increase in tax returns. Custom duties fell 100 billion to 600 billion won amid dwindling imports. Total income gained 200 billion won to 47.9 trillion won, and total spending grew 1.7 trillion won to 33.7 trillion won.
The government debt reached 692.2 trillion won as of the end of July, up 5.4 trillion won from a month ago.
By Sohn Il-seon and Choi Mira
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