Gov't secures 2 tln won from 2008 tax surplus for extra budget

SEOUL, Feb. 10 (Yonhap) -- The government has secured around 2 trillion won
(US$1.45 billion) from last year's tax surplus for an extra budget currently
under consideration to jump-start the fast slumping local economy, the finance
ministry said Tuesday.
Tax revenues that go into the general account totaled 181.6 trillion won last
year, while expenditure came to 175.5 trillion won, bringing the tax surplus to
6.5 trillion won, according to the Ministry of Strategy and Finance.
"Out of the total, we will carry over 1.5 trillion won to this year's budget and
then 4.6 trillion won will remain as net tax surplus," Choi Gyu-yeon, director
general of the ministry's treasury bureau, said in a press conference.
"We will be able to tap 2.1 trillion won from the surplus for a possible
supplementary budget after paying national debts and providing subsidies to
regional governments. We can have the money ready for the purpose by the end of
March," he added.
In December, the parliament passed a 284.5 trillion won budget for this year, an
increase of over 10 percent from the previous year. Demand has been growing for
an extra budget aimed at kick-starting the slumping economy.
According to the nation's central bank, the economy shrank 5.6 percent in the
final quarter of last year from three months earlier, the sharpest contraction in
more than a decade.
With declining demand for Korean goods from major economies hit hard by global
recessions, major think tanks and investment banks predicted negative growth for
the export-driven economy.
Earlier last week, the International Monetary Fund predicted the economy will
shrink 4 percent this year, the first recession since the nation was hit by the
Asia-wide financial meltdown in 1997.
The state-run Korea Development Institute recently echoed the pessimism, saying
that the nation's economy, Asia's fourth-largest, is "in a recessionary phase,"
amid faltering exports and domestic demand.
On Friday, Yoon Jeung-hyun, the nation's new finance minister, told a
confirmation hearing at the National Assembly that he "agreed" to the need for an
extra budget, calling for bipartisan support from lawmakers for the expanded
spending plan. He didn't elaborate on details including its scale and time frame
but some observes expect the nation to push for a 10-trillion won extra budget.
Meanwhile, the nation's tax revenues including the general and special accounts
amounted to 232.17 trillion won last year, compared with 216 trillion won a year
earlier. Expenditure totaled 222.89 trillion won, according to the ministry.
The government collected a total of 36.4 trillion won in individual income taxes
last year, down 6.5 trillion won from a year earlier, while corporate taxes
increased by 3.7 trillion won to 39.2 percent, the ministry said.
The falling local currency and increased imports brought up the nation's tariff
income, with the revenue growing 18.4 percent to 8.8 trillion won, the ministry
said.
Stock transaction taxes, however, declined 19.6 percent to 2.8 trillion won amid
bearish market sentiment, the ministry said. The nation's main stock index
plunged around 40 percent last year alone.
kokobj@yna.co.kr
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