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(LEAD) S. Korea's tax-GDP ratio nears 27 pct in 2018

All News 10:57 August 26, 2019

(ATTN: CORRECTS percentage change for OECD average to 0.8 from 1.2 in last para)

SEOUL, Aug. 26 (Yonhap) -- South Korea's tax-to-gross domestic product (GDP) ratio reached nearly 27 percent in 2018, but it was lower than that for other major economies, a report showed Monday.

The country's tax-to-GDP ratio came to 26.8 percent last year, up 1.4 percentage points from the prior year, according to the report from the National Assembly Budget Office.

It was the steepest on-year increase in 10 years, and last year marked the fifth consecutive year of rise.

The ratio refers to a country's tax revenue and social security contributions divided by its GDP.

(LEAD) S. Korea's tax-GDP ratio nears 27 pct in 2018 - 1

Last year's increase was attributed largely to the country's increased tax burden. South Korea's tax burden rose to 20 percent of its GDP in 2018 from 18.8 percent a year earlier.

Still, South Korea had a lower tax-to-GDP ratio than other members of the Paris-based Organization for Economic Cooperation and Development (OECD).

The office didn't provide the OECD's average tax-GDP ratio for 2018, but the figure was 34.2 percent in 2017 and 34 percent in 2016.

Asia's fourth-largest economy has posted faster on-year growth. South Korea's tax-GDP ratio came to 25.4 percent in 2017, up 2.3 percentage points from 2013, with the OECD average gaining 0.8 percentage point to 34.2 percent over the cited period.

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