Ahn Il-hwan (right), Vice Minister of the Ministry of Strategy and Finance, clicked the Gross Revenue and Total Revenue Closing button at the ‘2020 FY2020 Total Revenue and Total Revenue Deadline Ceremony’ held at the Korea Financial Information Service in Jung-gu, Seoul on the 9th have. Provided by the Ministry of Strategy and Finance
Due to the spread of Corona 19, last year’s tax revenue decreased by nearly 8 trillion won from 2019. This is the effect of a sharp decrease in corporate tax due to contraction in corporate activities.
However, I was able to avoid the’wash punk’ I was concerned about. This is due to the fact that the government reduced its tax target by more than 10 trillion won in the process of preparing an additional budget (additional budget) last year, and the capital gains tax and securities transaction tax surged due to the vitalization of real estate and stock trading.
Corona aftermath… 2nd year tax reduction
Looking at the results of total revenue and revenue for fiscal 2020, which the government ended on the 9th, last year’s total revenue was 465 trillion won, and total revenue was 453.8 trillion won, respectively. The surplus of revenue minus expenditures was 11.700 billion won, of which 9.4 trillion won remained in the black, excluding 2.300 billion won carried over to this year’s budget. It has been in the black for six consecutive years since 2015.
Last year’s national tax revenue was only 285 trillion won, down 7.900 trillion won from 2019 (293 trillion 450 billion won). In 2019, tax revenues declined by about 120 billion won compared to the previous year, followed by a decline for two consecutive years.
Previously, tax revenues declined four times in 1998, 2009, 2013, and 2019. This is the first time that tax revenues have declined for two consecutive years. The rate of decrease in tax revenues (-2.7%) is the second largest after 1998 (-3.0%) at the time of the financial crisis.
How much tax has been removed for each major categoryUnit: Won
| 2020 budget | 2020 settlement | Increase or decrease (increase rate) | |
|---|---|---|---|
| Total national tax | 279 trillion 7123 billion | 285 trillion won | 5,833.9 billion (2.1%) |
| Comprehensive income tax | 16,956.2 billion | 16.73 trillion | -843.2 billion (-5.2%) |
| Corporate tax | 58,4,753 billion | 55,5132 billion | -2,962.1 billion (-5.1%) |
| Capital gains tax | 17 trillion 4,041 billion | 23,655.8 billion | 6.25 trillion (35.9%) |
| Securities transaction tax | 4.93 trillion | 8,7,587 billion | 3,823.7 billion (77.5%) |
| Comprehensive Real Estate Tax | 3,321 billion | 3.6 trillion won | 289.6 billion (8.4%) |
‘Tax punk’ was avoided thanks to the transfer tax and transaction tax
Last year’s tax revenue was 5.8 trillion won (2.1%) more than the government’s target of 279 trillion won (279 trillion won). However, this is because the government drastically reduced the target value, which was originally 292 trillion won, after going through the supplementary administration. There is also an impact that taxes were lifted more than 10 trillion won more than expected due to the vitalization of the real estate and stock markets.
As corporate activities declined due to the corona, the corporate tax was only 5,510 trillion won, less 2,960 billion won (16.66 trillion won compared to last year) than the original target. Transportation energy environment tax (-1,500 billion won), comprehensive income tax (-8,800 billion won), and tariffs (660 billion won) have also decreased.
Among these, last year’s asset market transactions such as real estate and stocks supported tax revenue. The capital gains tax recorded 23,660 billion won, an increase of 6,250 billion won, and the securities transaction tax, recorded 8.76 trillion won, an additional 3,820 billion won. In 2019, the volume of housing transactions from 1.569,000 units increased to 2022,000 units in a year, and the annual securities transaction value increased from 2,288 trillion won to 5,709 trillion won.
Annual deficit, less than expected
As the settlement of the fund has not yet been finalized, the extent of the fiscal deficit or national debt as of the end of December has not been disclosed. However, as taxes were lifted 2.1% more than originally expected, the annual deficit could also be slightly reduced.
The government predicted that the annual managed fiscal deficit last year was 111.6 trillion won, which is 6.1% of the gross domestic product (GDP). As of the end of November, the managed fiscal deficit was 98.3 trillion won. The government has announced a plan to manage national debt at 84.49 trillion won (43.9% of GDP) by the end of the year.
Sejong = Park Se-in reporter [email protected]
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