2024-08-04 22:42:12
It was revealed that the corporate tax collected as of June is less than 40% of this year’s target. This is the slowest pace since 2014, when related statistics were first confirmed. The government is expecting that tax revenues will improve with the interim corporate tax payment starting this month, but there are observations that even this will not be easy for companies that had deficits last year, such as Samsung Electronics, to deduct their losses.
According to the Ministry of Strategy and Finance on the 4th, corporate tax revenue from January to June this year was tallied at 30.7 trillion won, a decrease of 16.1 trillion won (34.4%) from a year ago. This amount is equivalent to 39.5% of the corporate tax (77.7 trillion won) that the government plans to collect this year.
Normally, corporate tax is collected at around 60% of the target amount during the period from March to May, when companies pay taxes based on the previous year’s performance. However, in the first half of this year (January to June), many companies, including Samsung Electronics and SK Hynix, did not pay a single penny in corporate tax due to operating losses last year, resulting in a progress rate of less than 40%. This is the lowest level since 2014, when related statistics were first confirmed. Last year, when there was a tax deficit of 56 trillion won, the progress rate for corporate tax in the first half was 44.5%.
Most companies pay taxes for their performance in the first half of this year in August or September. For this reason, the government expects corporate tax revenue to recover starting this month when interim prepayments are made. However, when imposing interim prepayment taxes, a portion of the deficit from last year is deducted from companies that had deficits last year. Despite the favorable business environment in the first half of the year, corporate tax revenue may not be collected as much as expected.
As corporate tax performance, which accounts for more than 20% of the total, is in crisis, national tax revenue is also taking a hit. As of June, national tax revenue was 168.6 trillion won, down 9.98 trillion won (5.6%) from a year ago. This is equivalent to 45.9% of the target for this year, which is nearly 7 percentage points lower than the average progress rate (52.5%) over the past five years.
Local tax revenues were also found to be in an emergency due to worsening corporate performance. According to data received by Democratic Party lawmaker Yang Bu-nam from 17 cities and provinces across the country, the 10 places where local tax payment rates fell as of June this year compared to last year were Seoul, Incheon, Gwangju, Sejong, Gyeonggi, Chungnam, Gyeongbuk, Jeonbuk, Jeonnam, and Jeju. As corporate performance continued to worsen last year, local income taxes paid by corporations were also hit.
Among them, Seoul collected 11 trillion won in local taxes by June, securing 38.9% of this year’s target (28.4 trillion won). This is 1.2 percentage points lower than last year. Gyeonggi-do also had a progress rate of 44.2% in the first half of the year, 2.7 percentage points lower than a year ago. In the case of Jeollanam-do, this year’s progress rate was 48.7%, a 7.5 percentage point drop from a year ago, showing the largest decrease.
Sejong = Reporter Song Hye-mi [email protected]
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2024-08-04 22:42:12