Deadline for fiscal year 2020
Corporate tax reduction of 16.7 trillion won due to corona shock
Transfer tax of 7.6 trillion won and securities transaction tax of 4.3 trillion won in real estate boom
5.8 trillion won more than expected… tax estimate error is 2.1%
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Due to the corporate tax shock from the novel coronavirus infection (Corona 19), last year’s national tax revenue plunged 8 trillion won from the previous year. It is the first time that it has declined for the second year in a row. However, due to the boom in the asset market such as real estate and stocks, the capital gains tax and the securities transaction tax jumped and the effect of a wealth increase was added, which partially offset the decrease in tax revenue.
According to the results of the February issue of monthly fiscal trends announced by the Ministry of Strategy and Finance on the 9th and the closing of total revenues and expenditures for fiscal year 2020, last year’s national tax revenues decreased by 7.900 trillion won from 2019 to 285 trillion won. Last year, the government formulated two additional budget bills last year and estimated 279 trillion won, with a tax revenue correction of 800 billion won and 1.3 trillion won, to compensate for a total of 1.42 trillion won, which came in 5,800 billion won more.
This is because the capital gains tax increased by 7.6 trillion won from a year ago due to the increase in real estate transaction volume. Inheritance and gift taxes increased by 2 trillion won as gifts increased significantly amid rising asset prices. Securities transaction tax also increased by KRW 4.3 trillion as the amount of securities trading increased sharply along with the Donghak Ant Movement. Comprehensive real estate tax also increased by KRW 900 billion due to an increase in the fair market value ratio (85% -> 90%) and the increase in the publicly available real estate price. Despite the decrease in the number of employed, the earned income tax also increased by 2.4 trillion won due to the increase in regular workers.
However, the sluggish corporate performance in 2019 and the first half of 2020 resulted in a direct hit, resulting in a drop of 16 trillion won in corporate tax. VAT decreased by KRW 5.900 trillion due to a rise in the local consumption tax rate (15% -> 21%) and a decrease in nominal private consumption.
The fiscal year 2020 ended last year with total revenue of 465 trillion won and total revenue of 455.8 trillion won. The settlement surplus was KRW 1.17 trillion, and the world surplus, after deducting the amount carried over by KRW 2.3 trillion, recorded KRW 9.400 trillion (general account 5,700 billion won, special account 3.5 trillion won). The government plans to prepare a national settlement report based on the results of the deadline and submit it to the National Assembly by the end of May after a settlement inspection by the Board of Audit and Inspection. The fiscal balance, national debt, and financial statements are expected to be released in April.
/ Sejong = Reporter Hwang Jeong-won [email protected]
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