Chip boom set to push Korea's excess tax revenue above $37 billion
Samsung Electronics' Hwaseong plant in Gyeonggi Province / Courtesy of Samsung Electronics
Samsung, SK hynix corporate tax payments key to revenue windfall
Korea is on track to collect more than 50 trillion won ($37 billion) more in tax revenue than projected earlier this year, as robust earnings in the semiconductor sector are set to bolster coffers, according to government insiders Sunday.
The excess tax revenue could also substantially increase the resources available for the Future Fund, a new fiscal vehicle included in the government’s 2027 budget proposal, potentially exceeding 200 trillion won in total.
The Ministry of Finance and Economy is scheduled to unveil an updated forecast for 2026 national tax revenue Wednesday, together with its August tax collection data.
The government had already revised its annual tax revenue forecast upward when it drew up the supplementary budget passed by the National Assembly in April. The estimate was raised by 25.2 trillion won to 415.4 trillion won from 390.2 trillion won under the original budget.
Should tax receipts exceed the revised estimate by more than 50 trillion won, annual national tax revenue would rise to about 465.4 trillion won. That would easily eclipse the previous record of 395.5 trillion won in 2022 and mark an increase of more than 90 trillion won from last year.
Tax collection figures available so far have already shown marked improvement.
Between January and July, national tax revenue totaled 274 trillion won, an increase of 41.4 trillion won from the same period a year earlier, according to the finance ministry.
Corporate tax receipts for the same period climbed 4.4 trillion won to 51.8 trillion won as companies reported stronger earnings. Income tax collections, meanwhile, increased 12.2 trillion won to 89.3 trillion won, supported by higher performance-based bonuses and an increase in property transactions.
Revenue from securities transaction taxes surged 348.5 percent from a year earlier to 8.2 trillion won amid a KOSPI bull run. The special tax for rural areas, which is linked to KOSPI trading activity, also soared 182.5 percent to 13.1 trillion won.
Budget Minister Park Hong-geun presents the government’s 2027 budget proposal during a Cabinet meeting at the presidential office in Seoul, Sept. 1. Yonhap
For excess tax revenue to exceed the 50 trillion won mark, tax collections between August and December would have to exceed 191.4 trillion won.
The government expects that target to be within reach, largely due to interim corporate tax payments from semiconductor companies, which will be reflected in the August and September figures.
Corporate tax receipts through July stood at 51.8 trillion won, up 4.4 trillion won from a year earlier, but the figure does not yet include interim payments from corporations that close their books in December.
The impact could be substantial, given the strong first-half earnings of Korea’s two chip giants. Samsung Electronics and SK hynix recorded cumulative operating profits of 146.7 trillion won and 98.2 trillion won respectively, bringing their combined figure to nearly 245 trillion won. Their interim corporate tax payments are expected to play a significant role in determining the final amount of tax revenue for the year, and the amount in the Future Fund.
The fund is intended to finance investment in youth, future growth engines, regional development and education, with the broader goal of raising Korea’s potential growth rate. It is also designed to serve as a fiscal buffer that can be tapped if weaker tax collection leaves the government facing a revenue shortfall.
At the heart of the fund is 162.3 trillion won in what the government defines as “additional tax revenue.” Under a formula established by the Ministry of Planning and Budget, any domestic tax revenue exceeding the baseline trend, calculated using the average annual growth rate over the past 10 years, will be classified as additional tax revenue and earmarked for the fund.
That 162.3 trillion won is separate from the excess revenue expected to emerge from the government’s revised estimate for this year.
Combining the 162.3 trillion won with projected excess tax revenue for 2026 would put the potential pool of resources at 212.3 trillion won.
Still, whether the entire amount of excess tax revenue will ultimately flow into the Future Fund has yet to be determined. The government plans to decide how the additional revenue will be used once the updated tax estimate is finalized.
“Once the final amount of excess tax revenue is confirmed, we plan to go through internal discussions and also consult with the presidential office and the Ministry of Finance and Economy,” Budget Minister Park Hong-geun said at a press briefing on Sept. 17.