S. Korea’s tax revenue sinks through April on weak corporate performance

South Korea's tax revenue fell 6.3 percent on-year, or 8.4 trillion won (US$6.83 billion), during the first four months of 2024 due mainly to weak corporate performance, the finance ministry said Friday. The government collected 125.6 trillion won in taxes this year through April, compared with 134 trillion won from a year earlier, according to the Ministry of Economy and Finance. The decline was due mainly to the fall in corporate taxes collected and income taxes. The collection of corporate taxes sank 35.9 percent on-year, or 12.8 trillion won, to 22.8 trillion won during the four-month period. Listed companies in South Korea experienced a double-digit fall in their operating profits last year, and more than 100 companies turned to deficit in a year, according to government data. The amount of income tax collected fell 1.1 percent on-year to 35.3 trillion won as companies slashed performance-based payments and other incentives for employees. But the value-added tax collected climbed 12.2 percent to 4 0.3 trillion won, and the stock exchange tax gained 1.7 percent to 1.9 trillion won. In April alone, the country's total tax revenue slid 13.2 trillion won from a year earlier to 40.7 trillion won. The decline has raised concerns about a possible yearly tax revenue shortfall, though the ministry voiced hope for an improvement in May and expected a tax revenue shortfall to be unlikely in 2024. Last year, the country's total revenue fell 77 trillion won on-year to 497 trillion won, as tax collections dropped due to poor corporate performance and the property market slump. Source: Yonhap News Agency