Seoul: South Korea's tax revenue is expected to rise 9.9 percent from a year earlier in 2025 but fall short of the government's initial projection, the finance ministry said Thursday. The government anticipates collecting an estimated 369.9 trillion won (US$263.7 billion) in taxes this year, marking an increase of 33.4 trillion won from 2024, according to a tax revenue re-estimation by the Ministry of Economy and Finance.
According to Yonhap News Agency, the annual tax revenue will be smaller than the initial projection of 372.1 trillion won made when the government proposed an extra budget bill in June. The finance ministry attributed the revised estimate to the appreciation of the Korean won, which is expected to result in a 2.4 trillion won drop in import-related value-added tax. The average won-dollar exchange rate stood at 1,439 won in the January-May period but decreased to 1,379 won in the June-August period.
The extension of a fuel tax cut aimed at easing financial burdens and income tax refunds for self-employed workers, such as delivery riders, are also contributing factors to the decline in tax revenue, the ministry noted. Despite these challenges, revenue from income tax is projected to increase by 10.9 trillion won from last year due to a gradual economic recovery. Additionally, corporate tax revenue is expected to grow by 21.1 trillion won, supported by improved corporate earnings, according to the ministry.