Analysis of FY2018 Total Revenue Settlement of Accounts
Published on 19 August 2019
Published by Income & Corporate Tax Analysis Division of the Estimates and Tax Analysis Department
According to the FY2018 settlement of accounts submitted by the government, total revenues increased by 34.7 trillion won from 2017 to 465.3 trillion won, exceeding the 2018 supplementary budget by 17.6 trillion won. Such increase in total revenues is thanks to an increase in tax revenues (by 10.6%) due to improved corporate performance and reasonable flows in the assets market.
Although total revenues remained at a positive level due to the recent improvements in terms of national tax revenues, economic downside risks are expanding in 2019 as a result of deteriorating external conditions such as a slowdown in global economic growth, weakened semiconductor industry performance and trade conflicts between Korea and Japan. Consequently, corporate performance, which was driving the tax revenue increase, is deteriorating while the assets market is also exhibiting signs of weakness. Against this backdrop, it is somewhat difficult to posit optimistic prospects regarding tax revenue conditions.
The purpose of this report is to draw implications regarding this year’s fiscal management and next year’s tax revenue budget bill deliberation via the FY2018 Total Revenue Settlement of Accounts submitted by the Executive Branch. First, total revenues in 2018 were analyzed by specific item. In terms of national tax revenues, analyses were conducted as to the reason behind the positive trend in tax revenues as well as the parties bearing the burden of such increased tax revenues, while recommending ways to narrow down the estimation error. Committee-specific incomes excluding national tax revenues were analyzed in order to provide support for each committee’s settlement of accounts examination process, along with an in-depth examination of the settlement of accounts of the eight major social insurance funds, while noting policy implications of the future direction of fiscal management.