South Korea suffers record tax revenue shortfall in 2023 amid economic slowdown

South Korea
Photo credit: Yonhap

South Korea's tax revenue fell 51.9 trillion won (US$38.92 billion) in 2023 from a year earlier due mainly to weak corporate activities and the property market slump, the finance ministry said Wednesday, Yonhap reports.

The government collected 344.1 trillion won in taxes in 2023, down 13.1 percent from 395.9 trillion won a year earlier, according to the Ministry of Economy and Finance.

Compared with the ministry's forecast made in the 2023 budget planning, the country suffered 56.4 trillion won of shortfall, a record amount.

The ministry later revised the forecast and projected 341.4 trillion won of tax revenue in 2023.

The decline in the yearly tax revenue was due mainly to the fall in corporate taxes collected and income taxes amid an economic slowdown.

The collection of corporate taxes shed 23.2 trillion won in 2023 from a year earlier, or 22.4 percent, to 80.4 trillion won.

During the first half of last year, operating profits of listed companies combined dived 70.4 percent on-year to 18.8 trillion won, according to government data.

The amount of income tax collected also fell 10 percent on-year, or 12.9 trillion won, to 115.8 trillion won in 2023 due to the real estate market slump.

The value-added tax collected last year went down 7.9 trillion won, or 9.6 percent, to 73.8 trillion won on sluggish private consumption and the decline in imports, the ministry said.

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