Corporate tax revenue is projected to surpass 200 trillion won for the first time, driven by a boom in the semiconductor industry. This marks the first time in 15 years that corporate tax revenue will exceed income tax revenue.
According to the Ministry of Economy and Finance's national tax revenue budget proposal released on September 14, next year's corporate tax revenue is expected to reach 216.7 trillion won, which is 36.7 trillion won more than the projected income tax revenue of 180 trillion won.
This will be the first time since 2012 that corporate tax revenue has surpassed income tax. In 2012, income tax revenue was 45.8 trillion won, while corporate tax revenue was slightly higher at 45.9 trillion won.
Since then, corporate tax revenue has fluctuated significantly based on economic conditions. From 2012 to 2015, it remained in the 40 trillion won range, increased to the 50 trillion won range in 2016 and 2017, and rose to the 70 trillion won range in 2018 and 2019. In 2020, it dropped to 55.5 trillion won but rebounded to 70.4 trillion won in 2021 and 103.6 trillion won in 2022.
However, as the semiconductor market downturn began, corporate tax revenue fell to 80.4 trillion won in 2023 and is expected to drop further to 62.5 trillion won in 2024. This significant decline led to a large tax revenue shortfall.
Since then, corporate tax revenue has shown signs of recovery, increasing from 84.6 trillion won in 2025 to an estimated 101.3 trillion won this year, with projections for next year reaching 216.7 trillion won. This will be the first time corporate tax revenue exceeds 200 trillion won.
This surge is attributed to the continued strength of the semiconductor market, with major companies like Samsung Electronics and SK Hynix expected to see substantial increases in operating profits.
In contrast, income tax revenue has shown a relatively stable growth trend. Due to rising prices, an increase in the workforce, and rising asset prices, income tax revenue steadily grew from the 40 trillion won range in 2012 and 2013 to surpass 100 trillion won in 2021. It is projected to reach 130.5 trillion won in 2025 and 136.8 trillion won this year, with an expected increase to 180 trillion won next year.
Value-added tax revenue has dropped to third place in tax revenue rankings as corporate tax revenue rises again, with next year's value-added tax revenue projected at 91.4 trillion won.
The concern is that the high dependence on the semiconductor industry could lead to volatility in tax revenue. Given that the South Korean economy is heavily reliant on semiconductor exports and growth, fluctuations in the semiconductor market can significantly impact corporate tax revenue.
There are concerns that unexpected tax revenue shortfalls during economic downturns could disrupt budget execution or limit policy options. Conversely, if tax revenue exceeds expectations, how to utilize the surplus will also be a challenge for financial management.
The government plans to use the newly established Future Response Fund as a financial stabilization mechanism.
Lee Tae-seok, head of the Fiscal and Social Policy Research Department at the Korea Development Institute (KDI), stated at a forum on September 11, "While an unusual increase in tax revenue is expected due to the semiconductor boom, its sustainability is uncertain as it is heavily dependent on the semiconductor market. This increase in tax revenue exceeds both scale and uncertainty beyond typical levels, necessitating the exploration of new fiscal systems that align with changing financial conditions."
He added, "The Future Response Fund can help protect planned investments over several years from the impact of tax revenue fluctuations and mitigate the risks of having to drastically cut spending or significantly increase bond issuance during crises."
* This article has been translated by AI.
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