Seoul: South Korea's tax revenue rose by 16.6 trillion won (US$12.1 billion) in the first four months of this year from a year earlier, driven largely by a surge in corporate tax collection, the finance ministry said Friday. The government collected 142.2 trillion won in taxes during the January-April period, up from 125.6 trillion won in the same period last year, according to data from the Ministry of Economy and Finance.
According to Yonhap News Agency, the increase was mainly attributed to higher corporate tax revenue, which amounted to 35.8 trillion won during the four-month period, up 57 percent from the same period the previous year. Cho Moon-kyun, a senior ministry official, noted that despite the sharp increase in corporate tax revenue, the semiconductor sector has been sluggish since the third quarter of last year, leading to corporate earnings falling short of earlier projections. Consequently, the tax revenue collection rate remains below the annual average.
The corporate tax collection rate stood at 40.6 percent during the four months of this year, slightly lower than the five-year average of 42.0 percent. Cho added that improved corporate earnings in the first quarter of this year could lead to higher advance payments of corporate taxes in August and September.
Income tax revenue also rose by 3.5 trillion won on-year to 38.8 trillion won in the cited period, largely due to an increase in bonus payments and a higher number of employed workers. Meanwhile, value-added tax revenue declined by 600 billion won during the same period, partly due to increased tax refunds and a base effect from last year's elevated figures.