South Korea’s Fiscal Deficit Narrows to 8-Year Low on Corporate Tax Surge
South Korea’s managed fiscal balance, a key indicator of the government’s underlying fiscal position, posted a deficit of 32 trillion won, or approximately $23.97 billion, in the first nine months of this year — the smallest shortfall for the January-September period since 2018. The improvement was
South Korea's fiscal balance saw a significant improvement in the first nine months of 2023, with a deficit of 32 trillion won, the smallest shortfall since 2018. This positive shift was primarily fueled by a surge in corporate tax revenue, which rose by 51.9 trillion won from the same period in 2022. Corporate tax receipts reached 127.8 trillion won, surpassing the supplementary budget's annual allocation of 101.3 trillion won by 26.5 trillion won.
The increase was largely due to strong business earnings, corporate tax collection, and a rise in other tax revenues, including income tax, value-added tax, and securities transaction tax. The government's revenue exceeded its expenditure, resulting in a consolidated fiscal balance surplus of 20.4 trillion won, compared to a deficit of 63.5 trillion won a year earlier.
The managed fiscal balance, excluding social security fund balances, improved to a deficit of 32 trillion won, down from 102.4 trillion won the previous year. Despite the overall improvement, government debt remains high, standing at 1,369.4 trillion won at the end of September, up 101.3 trillion won from the previous year.
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