{"id":2206633,"date":"2024-10-01T08:00:38","date_gmt":"2024-09-30T23:00:38","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206633"},"modified":"2024-09-30T15:44:17","modified_gmt":"2024-09-30T06:44:17","slug":"corporate-earnings-drop-sharply-driving-koreas-widening-tax-revenue-deficit","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/10\/corporate-earnings-drop-sharply-driving-koreas-widening-tax-revenue-deficit\/","title":{"rendered":"Corporate earnings drop sharply, driving Korea\u2019s widening tax revenue deficit"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">South Korea\u2019s <\/span><a href=\"https:\/\/www.moef.go.kr\/nw\/nes\/detailNesDtaView.do?searchBbsId1=MOSFBBS_000000000028&amp;searchNttId1=MOSF_000000000070798&amp;menuNo=4010100\"><span style=\"font-weight: 400;\">tax revenue fell<\/span><\/a><span style=\"font-weight: 400;\"> by $7.2 billion (9.4 trillion won) in the first eight months of 2024, mainly due to weak corporate earnings from 2023, according to the Ministry of Economy and Finance. Corporate tax revenue dropped 26.9% to about $35 billion (45.6 trillion won), reflecting a sharp profits decline for companies listed on the KOSPI and KOSDAQ.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite a rise in consumer spending that pushed value-added tax up by 13.6%, total revenue decreased by 3.9% year-on-year. The government expects a significant tax revenue shortfall for 2024, with total revenue projected to be $258.8 billion (337.7 trillion won), 8.1% lower than initial forecasts.<\/span><\/p>\n<p><b>WHY IT MATTERS<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The Yoon administration will likely cite the tax shortfall as justification for its <\/span><a href=\"https:\/\/koreapro.org\/2024\/08\/south-koreas-2025-budget-proposal-faces-political-and-economic-challenges\/\"><span style=\"font-weight: 400;\">proposed 2025 budget<\/span><\/a><span style=\"font-weight: 400;\">. The Cabinet approved in August the $519 billion (677.4 trillion won) budget, along with the 2024-2028 National Fiscal Management Plan, which aims to increase government spending by 3.2% while maintaining a belt-tightening approach.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although the conservative government may avoid introducing new taxes, it could look to <\/span><a href=\"https:\/\/www.koreatimes.co.kr\/www\/tech\/2024\/09\/129_380283.html\"><span style=\"font-weight: 400;\">raise utility rates<\/span><\/a><span style=\"font-weight: 400;\"> and increase its <\/span><a href=\"https:\/\/www.moef.go.kr\/nw\/nes\/detailNesDtaView.do?searchBbsId1=MOSFBBS_000000000028&amp;searchNttId1=MOSF_000000000070797&amp;menuNo=4010100\"><span style=\"font-weight: 400;\">issuance of government bonds<\/span><\/a><span style=\"font-weight: 400;\"> to help offset the deficit.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the long term, South Korea\u2019s aging population will reduce the tax base and increase welfare costs, placing further strain on fiscal policy. While R&amp;D cuts are unlikely due to the country\u2019s growing reliance on high-tech exports, broader budgetary constraints may limit government support in other areas, including disaster management and public housing.<\/span><\/p>\n<div class=\"content-tags\"><a href=\"https:\/\/koreapro.org\/tag\/business-economy\/\"><span class=\"tag\">Business &amp; Economy<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"<p>South Korea\u2019s tax revenue fell by $7.2 billion (9.4 trillion won) in the first eight months of 2024, mainly due to weak corporate earnings from 2023, according to the Ministry of Economy and Finance. Corporate tax revenue dropped 26.9% to about $35 billion (45.6 trillion won), reflecting a sharp profits decline for companies listed on [&hellip;]<\/p>\n","protected":false},"author":10407,"featured_media":2206634,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[24],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Corporate earnings drop sharply, driving Korea\u2019s widening tax revenue deficit - KOREA PRO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/koreapro.org\/2024\/10\/corporate-earnings-drop-sharply-driving-koreas-widening-tax-revenue-deficit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Corporate earnings drop sharply, driving Korea\u2019s widening tax revenue deficit - KOREA PRO\" \/>\n<meta property=\"og:description\" content=\"South Korea\u2019s tax revenue fell by $7.2 billion (9.4 trillion won) in the first eight months of 2024, mainly due to weak corporate earnings from 2023, according to the Ministry of Economy and Finance. 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