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Government Budget Increases by 6.5 Percent Next Year

Posted September. 28, 2005 07:35,   


The government budget for next year is set to reach 221.4 trillion won, a 6.5 percent rise from this year.

The tax burden per taxpayer will rise to 3.56 million won from the current 3.33 million won.

The national deficit is expected to reach 11.7 trillion won, and its debt will also hit 279.9 trillion won, 4.3 times larger than that during the 1997 financial crisis.

The South Korean government held a Cabinet meeting on September 27 at the Central Government Complex, presided over by Prime Minister Lee Hae-chan, to confirm the 2006 budget bill and fund management plan containing the above contents, and it decided to submit it to the National Assembly on September 30.

Next year’s budget bill includes 115.5 trillion won for the general account, 41 trillion won for the special account for separate projects, and 64.9 trillion won for funds. The general account expanded by 8.3 percent over the previous year’s general account before a revised supplementary budget was formulated.

The social welfare budget will be 54.6537 trillion won, a 10.8 percent increase from this year, accounting for 24.7 percent of the total expenses.

The reunification budget will also reach 1.5622 trillion won, 84.4 percent higher than this year, indicating that the expenses for a reunification will begin burdening the national budget to a greater extent.

The government budget’s dependency on taxpayers will accordingly reach 136.0092 trillion won, a 4.1 percent increase from this year (130.5907 trillion won). The local tax is estimated to rise to 36.75 trillion won from 34.13 trillion won this year.

The estimated tax burden per taxpayer is 3.56 million won, a 230,000 won rise from this year, which came from the total tax amount (including the estimated national and local tax) divided by the estimated population of 2006 (48.49 million).

Joong-Hyun Park legman@donga.com sanjuck@donga.com