SEOUL– South Korea’s tax revenue increased 4.1 trillion won (US$3.5 billion) in September from a year earlier amid an economic recovery and a boom in asset markets, the finance ministry said Tuesday.
The government collected 26.3 trillion won in taxes in September, compared with 22.2 trillion won a year earlier, according to the Ministry of Economy and Finance.
The government said tax revenue has increased so far this year as corporate tax income has risen in line with the economic recovery, while capital gains tax income gained amid a boom in the stock and property market.
In the first nine months of the year, tax revenue rose 59.8 trillion won on-year to 274.5 trillion won.
In the January-September period, the government’s total income, including tax revenue, came to 442.4 trillion won, up 88 trillion won from the previous year.
The country’s gross expenditures grew 37.2 trillion won on-year to 472 trillion won in the period as the government increased fiscal spending to cope with the economic fallout of the pandemic.
As a result, South Korea posted a fiscal deficit of 29.6 trillion won in the nine-month period, improving from a shortfall of 80.5 trillion won the previous year.
The central government debt amounted to 936.5 trillion won as of end-October, up from 819.2 trillion won at the end of last year. The ministry earlier forecast such debt will reach 937.8 trillion won this year.
The growth of tax revenue is expected to slow in the fourth quarter as stock and home prices will likely take a breather. The government also allowed pandemic-hit people to delay the payment of some taxes to early next year.
The government earlier estimated that the surplus of tax revenue will likely reach 31.5 trillion won for this year. With the expected excess tax income, the country drew up an extra budget worth 34.9 trillion won in July to help finance another round of relief funds for people in the bottom 88 percent income bracket.
But further excess tax revenue is widely anticipated amid the accelerating economic recovery and a boom in the asset markets. The finance ministry put the estimated surplus at some 19 trillion won for this year.
The ruling Democratic Party is pressing ahead with a plan to provide another round of emergency cash handouts to all people with excess tax revenue.
But Finance Minister Hong Nam-ki has opposed the provision of universal stimulus checks, saying that targeted support for vulnerable people is more effective.
The ministry said it plans to prioritize using excess tax revenue to compensate losses for small merchants hit by the pandemic.
Source: Yonhap News Agency