Tax revenue falls on tax cuts, sluggish economy

SEOUL, Sept. 11 (Yonhap) -- South Korea's tax revenue fell sharply in the first
five months of this year on an economic downturn and tax cuts aimed at bolstering
demand and investment, a report said Friday.
According to the report by the National Tax Service, 70.75 trillion won (US$57.8
billion) in taxes was collected in the January-May period, down 13 percent from
the same period a year earlier.
The contraction is mainly attributable to a steep decline in corporate and income
tax revenue, which fell 23.5 percent and 15.1 percent, respectively, over the
cited period, the report showed. Tax revenue from stock transactions, however,
rose 4.7 percent amid rebounding stock markets.
South Korea has been pushing to offer diverse tax benefits and stimulus measures
to bolster consumption and corporate investment, which have continued to be
sluggish due to the worst economic downturn in more than a decade.
Expanded fiscal spending and a downturn-caused decline in tax revenue are feared
to serve drag on the nation's fiscal soundness in the years to come, experts say.
Earlier this month, the finance ministry said it has pushed back the target for
balancing its budget to 2014 as recent economic stimulus packages have put a drag
on its fiscal soundness.
kokobj@yna.co.kr
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