South Korea’s total tax revenue in the first 10 months of the year climbed 23 trillion won ($19.7 billion) from a year ago, mainly driven by increased collection of corporate and value-added taxes despite a slowing economy.

According to data released by the Ministry of Strategy and Finance on Tuesday, the country’s total tax revenue amounted to 215.7 trillion won in the January-October period, up 23.2 trillion won from the same period a year ago.

In particular, corporate tax income rose 7.8 trillion won on year while value-added tax and income tax each climbed 6.8 trillion won over the cited period. The revenue from value-added tax has already exceeded the government’s annual target that was set last year, with the ratio of actual tax collected to target revenue reaching 100.7 percent. The government collected 60.2 trillion won in value-added tax from January to October this year.

Industry observers noted that a rise in the collection of value-added tax is led by an increase in private spending following a cut in individual consumption tax on cars in the first half of the year and the government-orchestrated nation-wide sales event in October.

Industry observers also expected that corporate tax revenue would reach over 50 trillion won this year for the first time on increased operating income of companies amid falling international oil prices.

With the rise in tax revenue, Yoo Il-ho, deputy prime minister and strategy and finance minister, called for frontloading of the annual spending budget in 2017 amid lingering political stalemate following the passage of the impeachment motion against President Park Geun-hye last week for an allegation of allowing her close friend Choi Soon-sil to interfere in state affairs and use their relationship for personal gain.

In particular, Yoo urged the Ministry of the Interior and the Ministry of Education to encourage regional governments and education offices to frontload their budgetary spending to prop up the economy. Early this month, the National Assembly approved a 400.5 trillion won government spending plan for 2017.

Yoo emphasized it is important to take preemptive measures to cope with growing uncertainties in the domestic and global economy.

By Na Hyun-joon

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