Tax revenue hit record high last year

By Kim Jae-won

The nation’s tax revenue hit a new record of 166 trillion won ($157.9 billion) last year, up 7.6 percent from 2009, thanks to increased taxes on personal as well as corporate income.

The figure was 3.6 percent or 6 trillion won higher than the government’s initial target set in early 2010, according to the National Tax Service (NTS) Monday.

“Most taxes increased thanks to upbeat economic conditions. Corporate and income taxes led the trend,” said NTS official Cho Hee-seon.

The Korean economy bounced back strongly to grow 6.2 percent in 2010 from a year earlier, although much of it was attributed to a rebound from a dip caused by the global financial crisis in the wake of the collapse of Lehman Brothers in late 2008.

Revenue from income tax from salaried workers jumped 15.7 percent to 15.5 trillion won in 2010, while corporate tax revenue grew 5.7 percent to 37.3 trillion won, the NTS said.

Manufacturers proved they hold the reins of Korea Inc. by paying the most corporate tax at 15.8 trillion won, followed by financial companies at 6.9 trillion. Korea is home to several world-renowned manufacturing companies such as Samsung Electronics and Hyundai Motor.

Construction firms came third with 3.5 trillion won, while services companies paid 3.2 trillion won in taxes.

The data shows various aspects of Korean society.

A 39.1 percent increase in revenue from selective excise tax, levied on luxury items and services, demonstrated consumers’ insatiable appetite for luxury brands.

In contrast the sagging housing market dampened revenue from comprehensive real estate tax, which plunged 14.8 percent to 1 trillion won.

The data also pinpointed the problems of an aging society. Annuity income tax rose 264.9 percent to 1.5 billion won in 2010 due to the increasing number of taxpayers who collect pensions.

The tax authorities aim to reap 175 trillion won in taxes this year. During the first four months of the year, cumulative tax revenue amounted to 73.4 trillion won, up 7.6 trillion won from the same period last year.

To achieve the amount, the NTS said it will investigate hidden tax resources from overseas financial accounts and the incomes of professional services.

The tax agency usually releases a statistics book a year later due to processing time, but it made public the revenue data earlier than usual for the convenience of taxpayers and economists.