Tax burden in South Korea to exceed 20 pct this year

(The Korea Herald/ANN): South Korea’s tax burden ratio is expected to surpass 20 per cent of its gross domestic product mark for the first time this year, as the government pushes forward expansionist fiscal policies, officials said Sunday.

The nation’s tax income this year is estimated at 365 trillion won ($323.6 billion), up 5.5 per cent from the previous year, according to data compiled by the Ministry of Economy and Finance and Ministry of Interior and Safety.

Of the estimated total, national taxes will account for 287.1 trillion won, up 19 trillion won from the initial target amount, the Finance Ministry said. The Interior Ministry, in charge of local affairs and taxes, suggested that local taxes will total at 77.9 trillion won.

With the country’s estimated GDP at 1,799.6 trillion won, the increase in tax revenues is to raise this year’s tax burden to an unprecedented 20.28 per cent.

The tangible increase in tax revenues was largely attributable to the Moon Jae-in administration’s blueprint of expansive fiscal policies. His policy stress on “income-led growth” and “fair economic order” were backed by a series of tax system revisions, including a hike in the corporate tax rate and expansion of real estate tax brackets.

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