Analysis of Yoon Seok-yeol's Tax Cut and its Effects on Income Tax Revenue in 2023

7.2 trillion won less in transfer tax and 2.4 trillion won less in comprehensive income tax than last year
“Yoon Seok-yeol’s tax cut, the economic stimulus effect, should be disclosed in June”

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Analysis of data submitted by the Ministry of Strategy and Finance by Rep. Jang Hye-yeong (Justice Party) of the Planning and Finance Committee of the National Assembly found that capital gains tax and global income tax, which fell by less than half compared to last year, were the main cause of the decrease in income tax revenue.

Earned income tax revenue showed a relatively solid trend. Rep. Jang Hye-young believed that the slump in the asset market, such as the real estate and stock markets, and the sluggishness in financial income and business income due to the economic downturn greatly reduced the transfer tax and global income tax, while the earned income tax, which is less sensitive to the economy, supported tax revenue. .

Income tax revenue until March was 35.7 trillion won, accounting for 27.1% of the 2023 income tax revenue budget of 131.9 trillion won. Compared to the same period last year, 8.9 trillion won was collected less, which was the second largest decrease after corporate tax among major tax items.

Among them, capital gains tax revenue decreased by 7.2 trillion won compared to last year to only 5.9 trillion won, accounting for more than 80% of the decrease in income tax revenue. The reduction rate reached 55.0%.

Comprehensive income tax recorded 1.8 trillion won, down 57.1 percent from 2.4 trillion won less collected. On the other hand, earned income tax came in at 22.8 trillion won, an increase of 100 billion won.

The performance of the transfer tax and comprehensive income tax is very low compared to 2021 years. By March, 5.8 trillion won in transfer tax and 1.2 trillion won in composite income tax were less collected.

The total tax revenue from transfer tax and comprehensive income tax in 2021 was 52.7 trillion won, and the tax revenue budget this year is 54.4 trillion won. It is worrisome that even though the amount of tax revenue was increased, 7 trillion won less was collected by March.

The key to the future is the performance of global income tax payments in May. In order to catch up even with the progress rate (43.6%) in 2022, the cumulative tax revenue of 10.8 trillion won must be recorded by May.

In other words, 9 trillion won should come in in May. However, given that 5.1 trillion won came in in 2021 and 6.2 trillion won in 2022, it is questionable whether it will be able to record more tax revenue than that.

Rep. Jang Hye-young points out that the Ministry of Strategy and Finance, Kyung-ho Choo, has not proved anything. She criticized, “The Yoon Seok-yeol government said that tax cuts would stimulate the economy and tax revenue would naturally increase accordingly, but as a result, it was driven into a situation where even tax revenue to cope with the crisis was insufficient amidst the strong waves of economic recession.”

In addition, he said, “I cannot understand the policy that the re-estimated revenue budget for this year will be disclosed only in August.” will do,” he said.