South Korea's tax collection during the first half dropped to the lowest level in three years, affected by slowing economic recovery, sluggish corporate profits and consumer spending, government data showed Tuesday.
According to the data provided by the National Tax Service to Democratic Party Rep. An Min-suk, the government collected a total of 92.19 trillion won (US$82.6 billion) in taxes during the January-June period, down 9.41 trillion won, or 9.3 percent, from a year earlier.
This also marks the lowest first-half tax collection since 2011 when the government brought in 95.91 trillion won in taxes.
The decline comes mostly from falling revenues from businesses and consumers' spending.
Corporate tax revenue declined 4.19 trillion won or 16.3 percent from a year earlier, while income from value-added tax also fell 2.24 trillion won or 8 percent over the same cited period as consumers tightened their purse strings.
The lackluster tax collection figures raise concerns that tax revenue shortage problems could worsen in the months to come as the pace of the overall economic growth remains slow.
A tax shortage could also hamper the government's push to expand spending on diverse welfare programs promised by President Park Geun-hye, who took office in February for a five-year term.
In May, the National Assembly approved a 17.3 trillion won supplementary budget aimed at filling a hole in the government's revenue and securing money to boost the overall sluggish economy.
The tax revenue figures were unveiled as South Korea is locked in a heated debate over the government's recently proposed tax revision bill, which critics claim focuses more on increasing the tax burden of the middle class and salaried workers.
The government is currently working on making changes to the bill in a way that it does not increase the tax burden of those groups.
Meanwhile, the country's customs agency also said that it collected about 2.5 trillion won less in taxes during the first half from a year earlier amid the slowing economic recovery.
The Korea Customs Service (KCS) said that it collected 31.85 trillion won in taxes during the first half, compared with the 34.32 trillion won tallied during the same period a year earlier.
A large part of the decline comes from a drop in value-added tax levied on imported items, which came to 23.26 trillion won, down 1.37 trillion won from a year earlier, the data showed.
The KCS aims to collect a total of 66.54 trillion won in taxes this year. (Yonhap News)
