Korea Looking Foward to 7.5% Rise In Tax Collection Levels

by Mary Swire, Tax-News.com, Hong Kong

26 September 2001

With the use of credit cards on the increase in Korea, the Finance Ministry is expecting tax revenue levels to rise next year by 7.5 per cent to 104.2 trillion won (US$80 billion) compared to this year's forecast of 96.9 trillion won. According to the government, its recent tax breaks have resulted in more use of credit cards which enables it to monitor transactions and collect more VAT. However, there is unlikely to be much change in the levels of revenue raised from company taxes as most firms are reporting a fall in profits.

In a separate statement from the South Korean government, the Planning and Budget Ministry announced plans to present next year's Budget of 112.6 trillion won - up 7 per cent from this year's Budget - before the National Assembly. The extra revenue will be spent on public works such as improving roads, promoting business for small/ middle-sized exporters and boosting the economy which is expected to grow by a mere 2 per cent this year which is far less than the original forecast of 5 per cent.

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