Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Tax shortfall could reach $25 bil.: study
The Ministry of Economy and Finance building in Sejong / Yonhap
By Yi Whan-woo
The government might miss its tax collection target by up to 34.5 trillion won ($24.68 billion) this year, a shortfall much larger than the projected 29.6 trillion won, a study showed, Wednesday.
The Fiscal Reform Institute, a Seoul-based financial research lab, carried out the study after Korea’s tax revenue fell 11.3 trillion won from a year earlier during the first nine months of 2024.
The government collected 255.3 trillion won of taxes over the cited period, a 4.3 percent year-on-year fall from 266.6 trillion won in 2023, according to data from the Ministry of Economy and Finance.
The progress rate in tax revenue accordingly was measured at 69.5 percent, which is lower than the average of 78.3 percent for the past five years.
“Under the circumstances, the shortage in tax revenue may reach up to 34.5 trillion won,” the Fiscal Reform Institute said, noting the government on the other hand estimated the shortfall at 29.6 trillion won.
The institute said the government’s estimation will be incorrect, unless the economy “recovers in a dramatic manner in the remainder of 2024.”
The tax shortage is attributable mainly to a fall in corporate tax, which dipped 24.2 percent or 17.4 trillion won from the previous year to 54.5 trillion in the January-September period.
Operating profits of companies listed on the main bourse dipped 45 percent year-on-year in 2023. Those of firms listed on the tech-heavy Kosdaq also tumbled 39.8 percent.