Tax revenue estimated to hit record high in 2026 on chip boom

South Korea's tax revenue is projected to surge to a record 478.6 trillion won (US$353.7 billion) in 2026, driven by the semiconductor industry's booming performance, according to government data released on Wednesday. The figure represents a 104.7 trillion won increase from the previous year's 373.9 trillion won, surpassing the prior record of 395.9 trillion won set in 2022. The revised estimate exceeds the original 2026 budget projection by 88.4 trillion won.

Finance ministry officials attribute the unprecedented revenue surge to the semiconductor boom and the thriving stock market, both of which were challenging to forecast accurately. Operating profits in the chip sector were reportedly 70 to 80 percent higher than initially predicted.

Corporate tax revenue is anticipated to reach 136.4 trillion won this year, up 51.8 trillion won from the 2025 forecast. Samsung Electronics Co. and SK hynix Inc. are projected to generate around 638 trillion won in combined operating profits, a significant jump from the February estimate of 339 trillion won.

Income tax revenue is expected to hit 152.4 trillion won, a 19.4 trillion won increase from the original forecast of 132 trillion won. This rise is attributed to higher bonus payments at semiconductor and financial companies.

Securities transaction tax revenue is projected to reach 12.4 trillion won, a substantial 7 trillion won boost from the initial estimate of 5.4 trillion won, fueled by the bullish stock market's performance.

Experts suggest that more than 200 trillion won could be allocated to the Future Fund, a government initiative aimed at channeling tax revenue windfalls from the semiconductor boom into sustainable economic growth. This projection is based on a surplus tax revenue of 56.2 trillion won and windfall revenue of 162.3 trillion won.

The government has introduced the concept of "windfall revenue," referring to tax revenue exceeding long-term trends due to structural economic changes or significant fluctuations, such as the ongoing semiconductor supercycle. This definition differs from "surplus tax revenue," which pertains to revenues surpassing official forecasts due to short-term economic fluctuations or forecasting errors.