▪ Recent uncertainties in the tax revenue landscape have resulted in significant estimation errors, posing challenges to effective fiscal management.
▪ Below demonstrates the reasons behind the significant revenue deficit in 2023 and assesses the revenue projections for 2024, considering the persistence of the factors that led to the shortfall.
▪ The predominant factors behind the 2023 tax revenue deficit are corporate and transfer income taxes.
▪ The significant deficit in tax revenue primarily resulted from a sudden and severe decline in corporate earnings and a slump in the real estate market.
▪ NABO forecasts the national revenue for 2024 to be KRW 361.4 trillion, which is KRW 6.0 trillion (or 1.6%) less than the government’s proposed budget of KRW 367.4 trillion.
▪ In the event of a deteriorating tax revenue situation in 2024 due to negative economic factors, it will be important to explore policy options to address potential revenue shortfalls.