Tax Revenue Surges by 69 Trillion Won, but Government Debt Tops 1,372 Trillion Won
South Korea’s fiscal deficit narrowed to roughly half its level a year earlier as national tax revenue surged on the back of improved corporate earnings and a buoyant stock market. Corporate tax receipts led the recovery, bringing the managed fiscal balance deficit to its lowest level in eight years
South Korea's fiscal deficit narrowed significantly compared to the previous year, as national tax revenue surged by 69.1 trillion won, reaching 329.9 trillion won through August. This marked a 9.7 percentage point increase in the collection rate compared to the same period last year. Corporate tax receipts led the recovery, with a 28.2 trillion won increase year on year to 91.6 trillion won, driven by improved corporate earnings.
Income tax revenue also rose by 14.4 trillion won, while value-added tax revenue grew by 7.4 trillion won, reflecting stronger private consumption and imports. Despite this progress, government debt continued to climb, reaching 1,372.1 trillion won by the end of August, up 17.9 trillion won from the previous month. The increase was primarily due to Treasury bond issuances exceeding redemptions, with the government issuing 163.6 trillion won in bonds compared to redemptions of 61.5 trillion won.
The rising debt burden comes as government borrowing conditions become more challenging, with the average yield on government bond issuance increasing to 4.25% in September.
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