Analysis of FY2021 Total Revenue Budget Proposal
Published on 29 October 2020
Published by 1st Tax Analysis Division of the Estimates and Tax Analysis Department
Due to the economic slowdown incurred by the spread of COVID-19, total revenues in 2020 decreased by 0.5% YoY, and total revenue growth rate is expected to slow again in 2021.
The ｢2021 Budget and Fund Management Plans｣ and ｢2020 Tax Code Revisions｣ submitted by the government are deemed to have incorporated its policy intentions driven by a resolve to revitalize the economy, which has entered a slump due to COVID-19, including by spurring investments and consumption while reinforcing income redistribution. The National Assembly has also submitted 300 legislative bills regarding the Tax Code revisions in order to address the economic spillover effects of the pandemic. Therefore, at the upcoming regular sessions, in-depth discussions will be held on diverse issues including stimulating investments, supporting ordinary citizens as well as small and self-employed businesses, improving tax equity and creating a rational tax system.
This report provides a forecast of the 2021 total revenues while conducting an in-depth analysis of the ｢2020 Tax Code Revisions｣ and the proposed budgets for non-tax revenues in 2021. First, regarding the Tax Code revisions, an estimation was made of the effects on tax revenues and tax burden incidence, while mainly analyzing the policy effects of each tax item on the main revised content. Next, the analysis of proposed budgets for non-tax revenues includes a forecast of the eight social insurance funds along with an introduction of the key issues and policy implications involving various contributions and major items under accounting and funds.