By Yoon Ja-young
The government collected nearly 10 trillion won ($8.7 billion) more in taxes last year than planned.
Critics say this excess, in the face of an economic slowdown, means households and companies are being deprived of money for consumption and investment.
The Ministry of Strategy and Finance closed its books for fiscal year 2016 on Friday.
It collected 243 trillion won in taxes last year, 24.7 trillion won more than the previous year — the biggest increase recorded. It is also 9.8 trillion won more than it had originally planned.
The government attributed it to the strong real estate market and improved corporate performance in 2015, which is the basis for taxation in 2016.
“The wages of workers and the income of those who run their own businesses increased, on top of revitalization of the real estate market,” said Cho Yong-man, head of the ministry’s fiscal management bureau. “They led to an increase in earned income tax and comprehensive income tax, as well as capital gains tax.”
He also cited an overhaul of tax exemptions and tax cuts for conglomerates and high-income earners that helped collect more value-added tax and corporate tax.
The government amassed 7.7 trillion won more in value-added tax last year compared with the previous year. Corporate taxes increased by 7.1 trillion won.
Earned income taxes rose 3.9 trillion won on rising wages and employment.
Tax revenue from customs duty dipped 500 billion won on sluggish imports. Interest income tax decreased 400 billion won amid falling interest rates.
Critics say the excess in tax revenue shows the government lacks accuracy in tax planning and that it squeezed money from households and businesses during an economic recession.
But the government failed to reach its planned tax revenue for three years from 2012. The deficit was 2.8 trillion won in 2012, 8.5 trillion won in 2013 and 10.9 trillion won in 2014. The government was criticized then for basing its tax planning on too rosy an economic outlook.
Strategy and Finance Minister Yoo Il-ho said that the fiscal outlook is not favorable this year, citing further key rate hikes and protectionism in the United States, risks of a hard Brexit and downward pressure on the domestic economy.
“The government will focus on stable management of such risks, stabilizing the livelihoods of people and revitalizing the economy while focusing on preparing future growth engines,” he said.
The government’s total tax spending was 332.2 trillion won last year, up 12.8 trillion won from the previous year.
According to the ministry, the central government’s debt totaled 602.6 trillion won at the end of November.