Tax revenue up 6.3 tln won in July amid economic recovery

SEOUL-- South Korea's tax revenue rose 6.3 trillion won (US$5.4 billion) in July from a year earlier amid an economic recovery and a boom in asset markets, the finance ministry said Thursday.

The country collected 41.9 trillion won in taxes in July, larger than 35.6 trillion won the previous year, according to the Ministry of Economy and Finance.

The government said tax revenue has been on the rise this year as corporate tax income rose amid the economic recovery, while a boom in the stock and property markets jacked up capital gains tax income.

In the first seven months of the year, tax revenue increased 55.1 trillion won on-year to 223.7 trillion won.

In the January-July period, the government's total income, including tax revenue, came to 356.9 trillion won, up 76.5 trillion won from the previous year.

The country's gross expenditures grew 21.6 trillion won on-year to 377.6 trillion won in the cited period due to increased fiscal spending over the pandemic.

As a result, the country posted a fiscal deficit of 20.7 trillion won in the seven-month period, improving from a shortfall of 75.6 trillion won a year earlier.

The central government debt amounted to 914.2 trillion won as of end-July, up from 819.2 trillion won at the end of last year. The ministry earlier forecast such debt will reach 937.8 trillion won this year.

The government said the growth of tax revenue is likely to slow in August as the collection of consumption-related taxes may fall amid the toughest-ever virus curbs and the property market has stabilized on-year.

But it said the yearly excess tax revenue is expected to meet the ministry's earlier estimate of some 31.5 trillion won.

The finance ministry proposed a record high budget of 604.4 trillion won for next year to maintain expansionary fiscal policy. This will mark an 8.3 percent increase from this year's 558 trillion won.

With the big spending plan, the country's national debt is expected to reach 1,068.3 trillion won next year and the debt-to-GDP ratio will hit 50.2 percent, according to the ministry's estimate.

But the government said the country is expected to log a smaller fiscal deficit in 2022 as tax revenue will increase in line with the economic rebound.

Source: Yonhap News Agency

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