Bank of Korea becomes no. 1 corporate taxpayer

The corporation that paid the most corporate tax in Korea last year was the Bank of Korea, not any leading export company. According to the Bank of Korea's annual report, the Bank generated significant operating profits last year through overseas stock and bond trading, thus the corporate tax payable this year will amount to 2.5782 trillion won. Meanwhile, the corporate tax payable by Samsung Electronics, SK hynix, and Hyundai Motor are expected to fall short of this amount. It is neither essential nor sustainable for the Bank of Korea to make profits, as performance depends on overseas financial conditions. While it is the norm for companies to generate more profit, the situation has not been usual due to the economic downturn hindering business performance.

Samsung Electronics failed to pay corporate tax last year, posting an operating loss of 11.53 trillion won in 2023. Despite turning a profit last year, it is estimated that the tax payable this year will remain in hundreds of billions of won ranges considering the deficit carryforwards. The amount is a significant gap compared to the amount the company used to pay of 6 trillion won a year. SK hynix and Hyundai Motor are also expected to pay corporate tax of 2 trillion won each this year, considering various deduction items, which are still less than the Bank of Korea.

The problem is that it is becoming increasingly difficult for companies to make ends meet. The U.S. 25% tariff on overseas automobiles and reciprocal tariffs signal high alert for export industries. With uncertainties persisting for presidential impeachment, prolonged domestic recession, and rising credit risks, there is a risk of a national credit rating downgrade. International organizations are lowering their forecasts for Korea’s economic growth rate this year. British research firm Capital Economics lowered its forecast to 0.9%, predicting “0% growth.” S&P lowered its forecast by 0.8 percentage points from 2.0% to 1.2%.

Economies cover when companies are profitable and able to pay tax. Recently, the ruling and opposition parties agreed to establish a fund for high-tech strategic industries to invest 50 trillion won in future industries such as semiconductors, secondary batteries, bio, and artificial intelligence. Such efforts to increase corporate vitality should continue. The public and private sectors should join forces to minimize shocks coming from U.S. tariffs. We should not sit on our hands and watch the Bank of Korea to continue to make more money and pay more taxes than leading Korean companies.