South Korea's national tax revenue this year is projected to exceed the forecast issued with March's supplementary budget by more than 60 trillion won. A boom in semiconductors, along with securities-related taxes such as the securities transaction tax and the rural development tax far outpacing estimates, drove the increase.
The Ministry of Economy and Finance convened its tax revenue estimation committee on the 22nd and effectively finalized a revised estimate of this year's national tax revenue, according to related ministries on the 27th. Full-year revenue is most likely to land in the late 470 trillion won range, roughly 60 trillion won above the supplementary budget forecast of 415.4 trillion won. Compared with the 390.2 trillion won projected when the main budget was drawn up late last year, the revenue outlook has swelled by nearly 90 trillion won in a single year.
National tax revenue from January through July came to 274 trillion won, up 41.4 trillion won from a year earlier. On top of that, August interim corporate tax prepayments — the biggest variable for this year's revenue — came in stronger than expected. When the government raised its full-year corporate tax forecast to 101.3 trillion won from 86.5 trillion won, a 17.1% or 14.8 trillion won increase, at the time of the March supplementary budget, it put interim prepayments at about 40.4 trillion won. First-half results at Samsung Electronics and SK hynix improved far more than expected, however, and actual filings came in considerably above that level.
The stock market also lifted revenue. Securities transaction tax receipts totaled 8.2 trillion won from January through July, more than quadrupling from a year earlier and already filling 77% of the annual forecast set at the time of the supplementary budget. The rural development tax reached 13.1 trillion won, up 8.5 trillion won from a year earlier and equal to 96.3% of the annual projection. With stock trading hours extended to 8 p.m. from September, there is room for further gains depending on how the market performs.
Within the government, officials see the securities transaction tax and the rural development tax as the final variables determining the upper end of this year's revised estimate. Interim corporate tax prepayments have largely taken shape through filing results, while stock trading values can swing sharply even over short periods depending on market conditions. A senior government official said it was harder to predict how the securities transaction tax and the rural development tax would move through year-end than to gauge interim prepayments.
The volatility of revenue estimates, which can shift by tens of trillions of won depending on semiconductor conditions, is also likely to draw greater scrutiny. Revenue shortfalls of 56.4 trillion won and 30.8 trillion won were recorded in 2023 and 2024, respectively.
