South Korean Economy Witnessing Recovery

September 23, 2009 Taxation in South Korea  No comments

The Korean Government has announced an expected 3.9% increase in their tax collections for 2010.

According to statements made by the Korean Ministry of Strategy and Finance, on the 23rd of September, the country will see an extra KRW3.1 trillion tax receipts in 2010. The total tax take is projected to reach KRW171.1, approximately equivalent to US$143.1 billion.

The details of the increased tax receipt are expanded in the Korean government’s draft budget plan, which will be submitted to the National Assembly on October 1st. Income tax is expected to rise by 9.0% to KRW37.0 trillion. Value Added Tax (VAT) has a projected 5.0% rise to KRW48.7 trillion. Bucking this trend, corporate taxes are expected to experience a fall of 2.0% to KRW35.4 trillion, on account of weakened economic conditions and governmental tax corporate tax cuts. Increased employment and a buoyant property market are attributed to the tax intake recovery.

Korea is currently in the midst of an all round economic recovery, announcing a reduced government budget deficit. Sans any unplanned spending, government officials are hopeful in reaching their budget deficit target of KRW22 trillion. The increased tax take and reduced government spending are considered to be the key factors behind the improved budget position.

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