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Gov't declares tax revenue deficit of 59 trillion won

Posted September. 19, 2023 08:47,   

Updated September. 19, 2023 08:47


The government has formally declared a tax revenue deficit of 59 trillion won for this year, falling short of the initial forecast made during the preparation of this year's budget by 14.8%. This marks the highest error rate ever recorded in cases of inadequate tax revenue. The government intends to utilize surplus funds to address these shortfalls without creating an additional budget.

On Monday, the Ministry of Strategy and Finance announced that, following a reassessment of this year's tax revenue, the national tax revenue is anticipated to amount to approximately 341.4 trillion won. This figure falls short by 59.1 trillion won compared to the initial projection of 400.5 trillion won when formulating this year's budget. The error rate in tax revenue stands at 14.8%, marking the highest deviation in the tax revenue deficit since 1990 when computerized tax-related statistics began.

Notably, with a significant decline in companies' operating profits, corporate tax is projected to reach only 79.6 trillion won, representing a decrease of 25.4 trillion won (24.2%) compared to the previous estimate. Additionally, due to the influence of a contraction in the asset market, capital gains tax and inheritance and gift tax are also anticipated to decrease by 12.2 trillion won (41.2%) and 3.3 trillion won (19.5%), respectively.

With the actual tax revenue shortfall materializing, both the local allocation tax provided by the central government to local administrations and the local education financial grants allocated to 17 provincial and provincial education offices will collectively decrease by a total of 23 trillion won. This reduction occurs because approximately 40% of these funds are automatically deducted from domestic taxes.

To address the deficiency in tax revenue, the government intends to compensate with approximately 24 trillion won from surplus funds, avoiding the need to issue government bonds. Additionally, they plan to utilize around 4 trillion won from the global surplus that remained unspent from the previous year's taxes.