The family of the late Kim Jung-ju, founder of the gaming giant Nexon, has completed the payment of their inheritance tax, estimated at over 5 trillion won. (Image courtesy of Yonhap)
SEJONG, Sept. 12 (Korea Bizwire) – The family of the late Kim Jung-ju, founder of the gaming giant Nexon, has completed the payment of their inheritance tax, estimated at over 5 trillion won, drawing attention to its potential impact on South Korea’s tax revenue.
However, the actual cash contribution to the national coffers is expected to fall short of 500 billion won, as the bulk of the tax — approximately 4.7 trillion won — was already paid last year through a stock transfer to the government.
According to tax authorities and industry experts, the final cash payment, made last month by Kim’s widow, Yoo Jung-hyun, who serves as the chairwoman of NXC (Nexon’s holding company), and her family, is estimated to have boosted the month’s tax revenue by about 400 billion won.
The family had initially planned to pay the cash portion of the inheritance tax in installments of about 100 billion won annually over five years. Instead, they opted for a lump-sum payment, sources familiar with the matter said.
Following Kim’s death in February 2022, his family transferred NXC shares valued at approximately 4.7 trillion won to the government in February 2023 as a form of tax payment. When combined with the recent cash payment, sourced from share sales and loans, the total inheritance tax is estimated to exceed 5.3 trillion won.
Despite this substantial contribution, it falls far short of addressing South Korea’s current tax revenue shortfall. The government is facing a potential tax deficit of over 30 trillion won this year in the worst-case scenario. Official revised tax revenue projections are expected to be announced later this month.
From January to July of this year, national tax revenue amounted to 208.8 trillion won, down 8.8 trillion won from the same period last year. This is despite the government’s initial projection of a 23.2 trillion won increase in annual tax revenue to 367.3 trillion won for the year.
The shortfall is primarily attributed to a sharp decline in corporate tax revenue, which decreased by 15.5 trillion won in the first seven months of the year compared to the same period last year.
Inheritance and gift taxes, however, have remained stable, with 9.1 trillion won collected by July, similar to last year’s figures. This represents about 62% of the government’s annual target of 14.7 trillion won for inheritance and gift taxes.
Kevin Lee (kevinlee@koreabizwire.com)
