February tax revenue in South Korea increases by 2.3 trillion won year-on-year

In February of this year, national tax revenue was reported to have collected 2.3 trillion won more than in February of last year. The national tax revenue for January and February also increased by 2.9 trillion won compared to the same period last year, totaling 61 trillion won. Although tax revenue has increased significantly compared to the same period last year, the national tax revenue progress rate is lower than expected due to a substantial increase in this year's tax revenue budget.

According to the 'February national tax revenue status' released by the Ministry of Economy and Finance on the 31st, national tax revenue for February was 14.3 trillion won, an increase of 2.3 trillion won compared to the same month last year. This marks two consecutive months of increased monthly national tax revenue compared to the previous year.

The February national tax revenue report indicates that income tax collected 2 trillion won more than in February last year. The increase in earned income tax was due to an expansion of performance bonuses, while the increase in the capital gains tax resulted from a rise in housing transaction volume, which was 8,000 more than the same period last year.

In February of this year, value-added taxes increased by 1 billion won compared to February of last year due to improvements in imports, and inheritance and gift taxes rose by 3 billion won due to the increase in the number of deceased.

In February of this year, the transportation, energy, and environmental tax also increased by 1 billion won compared to February last year due to the restoration of the flexible tax rate on fuel taxes, while customs duties increased by 1 billion won. In contrast, the security transaction tax decreased by 3 billion won compared to February last year due to a decrease in securities transaction volume.

Looking at the cumulative tax revenue for January and February, it has increased compared to the same period last year. Income tax rose by 2.7 trillion won. The increase in earned income tax was due to the expansion of performance bonuses, and the increase in capital gains tax was a result of improvements in real estate transactions.

The corporate tax also collected 700 billion won more than in the same period last year due to increases in corporate interest and dividend income. During the same period, transportation taxes also increased by 300 billion won due to the partial restoration of the reduced fuel tax rate.

In contrast, value-added taxes decreased by 7 billion won compared to the same period last year. Although the imports increased, the rise in refund applications affected the revenue. The security transaction tax fell by 4 billion won compared to the same period last year due to a decrease in transaction volume for listed shares.

While tax revenue has increased this year, the revenue progress rate relative to the national tax revenue budget was at a low level. The progress rate in February this year was 15.9%. This means that 15.9% of the 382.3 trillion won in national tax revenue expected to be collected by the government in this year’s main budget had been collected by February.

This year’s national tax revenue budget is 382.4 trillion won, an increase of 45.9 trillion won compared to last year’s national tax revenue budget of 336.5 trillion won.

The progress rate of 15.9% in February of this year is lower than the progress rates of 17.2% in February last year and 16.8% for the past five years. However, it was higher than the progress rate of 13.5% in January and February of 2023, when a significant tax revenue shortfall occurred.