Gov't cuts tax revenue forecast on economic downturn

SEOUL, March 31 (Yonhap) -- The government said Tuesday that tax revenues will decline nearly 7 percent this year from an earlier projection as a protracted economic slowdown is expected to dent corporate and household income.

According to an extra budget plan submitted to parliament by the Ministry of
Strategy and Finance, tax revenues will amount to 157.34 trillion won (US$111
billion) this year, down 6.8 percent from an earlier projected figure of 168.75
trillion won.
The government expected that it will collect 32.23 trillion won in corporate
taxes this year, down 14.9 percent from the 37.88 trillion won it previously
forecast. Projected income tax revenue declined 9.2 percent to 39.98 trillion
won, while value-added tax fell 4.4 percent to 45.63 trillion won.
The downgrade is mostly due to an expected contraction of tax bases as the
economy slides towards the first recession in more than a decade.
South Korea's economy is feared to contract 2 percent this year as exports and
domestic demand plunge amid a worldwide recession. Last week, the government
endorsed a 28.9-trillion won extra budget, equivalent to 3 percent of gross
domestic product, to revive the slumping economy.
Of the total, 17.7 trillion won will be spent to create jobs and support
low-income households, with the remaining 11.2 trillion to be used to make up for
expected tax revenue shortfalls this year.
kokobj@yna.co.kr
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