Korea faces estimated $44.7 bn shortfalls in tax revenue this year

2023.09.19 14:17:02 | 2023.09.19 15:30:48

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South Korea’s national tax revenue this year is expected to fall short by 59.1 trillion won ($44.7 billion) compared to the initial estimate, marking its highest-ever shortfall.

The forecast was announced as part of the Ministry of Economy and Finance’s revised national tax revenue estimates on Monday, which considered the interim corporate tax pre-payments at the end of August.

The primary reason for the tax revenue shortfall is the sluggish economic recovery, which has led to poor corporate performance and a simultaneous decrease in major tax revenues, including corporate tax, income tax, and value-added tax. It is estimated that revenue from these three major tax categories will decrease by 52.4 trillion won, or 16.4 percent, compared to the earlier estimates for this year.

According to the finance ministry, this year’s national tax revenue will be 341.4 trillion won, a 59.1 trillion won decrease compared to the last year’s year-end tax revenue estimate of 400.5 trillion won, meaning that actual tax revenue falls short of the government’s initial budget for this year by 14.8 percent. The government’s tax revenue estimates have now recorded a double-digit margin of error for three years in a row.

By Kim Jung-hwan and Chang Iou-chung

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