The South Korean government eyes fresh record-high tax revenue this year, surpassing last year’s 318 trillion won ($285.8 billion) by about 20 trillion won thanks to a boom in the local real estate market and a supplementary budget plan.

“We projected this year’s national tax would reach 242 trillion won, but taking into account of additional tax revenue of about 8.8 trillion won to be collected through the new supplementary budget, it would increase to about 251 trillion won,” said Kim Dong-yeon, deputy prime minister for economy doubling as the finance minister, during a luncheon with local journalists.

That would be about 15 trillion won in excess of expectations, or 6 percent more than last year’s collection of 242.6 trillion won in national tax.

If taxes collected by local governments grow at similar level of 6 percent, their cumulative figure would come to around 80 trillion won. But the number could be much higher given the housing-sector boom.

Local taxes grew by 7.7 percent on average from 2010 to 2016.

Combining estimated national and local tax income, the Korean government is expected to collect total 337 trillion won, nearly 20 trillion won higher than last year’s government income. This would be the historic high in tax income.

In line with the rapid rise in total tax revenue, the country’s ratio of tax burden to its gross domestic product should also touch near 20 percent this year, which would the all-time high. The earlier record was 19.6 percent set in 2007 and it was 19.4 percent last year.

The government’s income would continue to rise onwards as the new government under President Moon Jae-in is mulling hiking income and corporate taxes to support its plan to expand the economy through increased jobs and income.

By Yoon Won-sup

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]