By Park Hyong-ki
The Korean government collected about 21 trillion won ($19 billion) more taxes in the first eight months of this year, compared to a year ago, thanks to an increase in corporate tax revenue on improved earnings.
The country’s tax revenue amounted to 172.4 trillion won from January-August this year, up 20.8 trillion won from a year, according to a monthly fiscal report by the Ministry of Strategy and Finance on Tuesday.
Despite an economic slowdown, the government’s tax collection rate stood at 74.1 percent, or 3.8 percentage points higher than the same period a year ago. Korea has set a target to secure 232.7 trillion won in tax revenue for this year.
“Improved corporate earnings and the reduction of tax benefits helped it to collect more taxes (on-year),” the ministry report said.
The government’s tax revenue from the corporate sector reached 39.7 trillion won in the first eight months, up 7.1 trillion won from a year ago. This increase in corporate tax revenue marked the highest among various taxes including value-added taxes and income taxes.
It collected 6.9 trillion won more consumption taxes at 44.9 trillion won in the same period, while its income tax revenue increased 5.1 trillion won at 46.7 trillion won.
The report added that an increase in income tax filings by self-employed and in real estate transactions were attributable to its higher tax collection.
The increase also led its fiscal deficit to decrease by 3.8 trillion won to 11.6 trillion won.
With its tax revenue and funds under management, the country’s total income amounted to 280.3 trillion won. It spent 264.5 trillion won from January to August, according to the fiscal report.
The opposition Minjoo Party of Korea had noted that the growth in state tax revenue may not last long as improvement in corporate earnings was mostly due to lower costs on falling oil and raw materials prices.