S. Korea's 2010 tax revenue to grow 5 pct on economic recovery

By Koh Byung-joon
SEOUL, Sept. 15 (Yonhap) -- South Korea's tax revenue will likely increase around
5 percent next year as faster-than-expected economic growth expands the overall
tax base, a government source said Tuesday.

Tax revenue will amount to about 172 trillion won (US$140.7 billion) in 2010,
compared with 164 trillion won the government earlier expected to collect for
this year, according to an official at the Ministry of Strategy and Finance. It
would be the first time that the nation's tax revenue has exceeded the
170-trillion-won mark.
The government collected 167.3 trillion won in taxes last year and initially
expected tax revenue to increase to 179.6 trillion won this year.
The projection, however, was lowered to 164 trillion won in April when the
government forecast the nation's economy will shrink 2 percent this year,
hard-hit by financial turbulence and a resulting protracted global recession.
South Korea's economy is showing signs of rebounding fast from the worst downturn
in a decade thanks to active fiscal spending and other stimulus measures. The
government recently revised up its growth projection to negative 1.5 percent.
Tax revenue is expected to expand next year also on the government's
recently-unveiled tax reform that focused on expanding its overall tax revenue
base.
According to tax revamp plans announced on Aug. 25, which abolished some tax
exemptions for high-income earners and large companies, the government expects
that it could collect 10.5 trillion won more over the next three years.
Buffeted by the global financial turbulence, the Seoul government has unveiled
diverse stimulus measures including a large-scale extra budget to kick-start the
slumping economy.
Increased fiscal spending, however, has raised concerns that the nation's fiscal
status could deteriorate in the years to come, prompting the government to rush
to find a new tax income base to plug a ballooning deficit.
kokobj@yna.co.kr
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