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(LEAD) Tax revenue sharply up despite economic slump

All News 15:16 January 10, 2017

(ATTN: ADDS more details in last 5 paras)

SEJONG, Jan. 10 (Yonhap) -- South Korea's national tax revenue increased sharply in the first 11 months of last year despite the protracted economic slowdown, government data showed Tuesday.

The government collected a total of 230.5 trillion won (US$192 billion) in taxes through November in 2016, up 24.5 trillion won from a year earlier, according to the Ministry of Strategy and Finance.

Especially, corporate tax income climbed 7.3 trillion won on-year to 51 trillion won during the January-November period, while income tax rose 7.3 trillion won to 63.8 trillion won and value-added tax revenue gained 7.7 trillion won to 60.5 trillion won.

The income tax and value-added tax revenues exceeded the government's annual target of 63.3 trillion won and 59.8 trillion won, respectively.

The government's income, which includes non-tax revenue, totaled 372.5 trillion won during the 11-month period, with 351.5 trillion won spent during the cited period.

The ministry said that businesses have posted better operating profits and paid more corporate tax as they made less investment amid a protracted economic downturn.

Also, a years-long boom in the local property market contributed to an increase in real estate transaction taxes that is classified as income tax, while brisk private consumption, which has played a role in offsetting a drop in exports and production last year, helped the government collect better-than-expected value-added tax.

Separate data showed that South Korea's companies listed on the benchmark KOSPI saw their operating profit rise 5.4 percent in the July-September period of 2016 from a year earlier, but their sales fell 2.8 percent over the same period.

Private consumption gained 2.7 percent in the third quarter and construction investment jumped 11.4 percent, while the country's gross domestic product grew 2.6 percent in the three-month period.

"The uptick in the national tax revenue is driven by one-off factors like a boom in the property market," Choi Young-rok, deputy finance minister for tax and customs affairs, said earlier. "The upbeat trend is expected to continue further next year, but some are worried that the pace will slow down due to rising uncertainties."

(LEAD) Tax revenue sharply up despite economic slump - 1


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