As the revised tax revenue forecast for this year approaches, attention is turning to the Future Response Fund, which may be bolstered by excess tax revenue. By July, national tax revenue had increased by over 41 trillion won compared to last year, indicating a more favorable trend than initially expected.
According to the Ministry of Economy and Finance on September 21, national tax revenue from January to July reached 274 trillion won, an increase of 41.4 trillion won from the same period last year. The tax revenue progress rate stands at 66.0%, the highest level recorded in the past five years.
The ministry plans to revise the annual tax revenue forecast at the end of this month, taking into account the results of corporate tax interim payments. The extent to which the annual tax revenue forecast is adjusted will be a key factor in estimating the size of the excess tax revenue.
Notably, the increase in tax revenue is particularly pronounced in major tax categories. By July, corporate tax revenue amounted to 51.8 trillion won, up 4.4 trillion won from the same period last year. Value-added tax revenue reached 69.4 trillion won, an increase of 8.1 trillion won, while income tax revenue rose to 89.3 trillion won, up 12.2 trillion won.
There has also been an uptick in taxes related to the asset market, such as securities transaction tax, likely influenced by increased trading volumes in the stock market.
However, it remains uncertain whether this trend will continue into the second half of the year. Corporate tax revenue may fluctuate based on corporate performance and interim payment results, while securities transaction tax could also vary with stock market trading volumes.
The results of the tax revenue revision are expected to have a direct impact on the size of the Future Response Fund. The government intends to utilize excess tax revenue as a funding source for this fund. The Ministry of Strategy and Finance plans to comprehensively review the size of the excess tax revenue and fiscal conditions after the Ministry of Economy and Finance releases its revised tax revenue results to determine the fund's size and utilization strategy.
Earlier, Park Hong-keun, Minister of Strategy and Finance, stated during a press briefing on the 17th, "We will be able to make judgments based on the final revised results from the Ministry of Economy and Finance. Once the revision results are out, we will discuss internally and communicate with the Blue House and the Ministry of Economy and Finance to decide on the use of excess tax revenue."
Consequently, if the revised results confirm excess tax revenue exceeding initial forecasts, the size of the Future Response Fund may also expand beyond previous plans.
There is speculation both within and outside the government that the fund could surpass 200 trillion won. However, the actual size will not be determined solely by the revised results, as not all of the increase in tax revenue will be allocated to the fund. Consideration must also be given to how much of the excess tax revenue will be used as fund resources and the future direction of fiscal management.
Lee Sang-min, a senior researcher at the National Fiscal Research Institute, noted, "The size of the Future Response Fund could increase depending on how much excess tax revenue is generated. If two conditions are met—passage of the proposed amendment to the National Finance Act and generation of excess tax revenue exceeding 30 trillion won—the fund size could approach 200 trillion won."
* This article has been translated by AI.
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