SEJONG, Jan. 12 (Korea Bizwire) – South Korea’s tax revenue rose sharply on-year in the first 11 months of 2015 thanks to higher cigarette prices and increased real estate transactions, the finance ministry said Tuesday.
In the January-November period, the government collected some 206.2 trillion won (US$171 billion) in taxes, up 16.8 trillion won from a year earlier, as more dues were collected from a rise in real estate transactions and higher tobacco prices, the ministry said in its monthly public finance report.
Asia’s fourth-largest economy experienced a boom in home purchases in 2015, while local cigarette prices moved up by 2,000 won starting in January.
The ministry said that while numbers for December have yet to be tallied, the annual tax earnings target of 215.7 trillion won will easily be met.
The amount for the 11-month period accounted for 95.6 percent of the government’s full-year tax revenue target, up 8.1 percentage points compared to the year before.
“Last year’s solid tax revenue will end four straight years of the government failing to meet its tax collection target,” a ministry source said. Seoul started posting shortfalls in tax earnings from 2011 onwards.
The finance ministry, meanwhile, said that while the government collected more taxes, its expenditures continued to rise, resulting in a operational budget deficit of 30.1 trillion won in the first 11 months of last year.
The operational budget excludes earnings generated by various pensions and employment insurance premiums that must be given back to the people, and only focuses on how much money the government actually spends.
As of late November, the central government’s debt stood at 561.2 trillion won, up 58.2 trillion won from a year earlier.