Corporate Tax Revenue Sees Sharp Decline

In a revealing confirmation hearing, Gu Yoon-cheol, nominee for Minister of Economy and Finance, highlighted a concerning 40% drop in corporate tax revenue over two years, from 100 trillion won in 2022 to 60 trillion won in 2024. This alarming trend has prompted discussions on potential corporate tax rate increases to broaden the tax base.

Seeking Solutions to Fiscal Challenges

Gu emphasized the need for strategic investments to fuel an AI transformation and ensure fiscal health. "We will secure funds for a true transformation of the Republic of Korea through measures such as addressing tax evasion and rationalizing tax equity," he stated, underlining the importance of performance-focused investments.

Behind the Numbers

The reduction in the highest corporate tax rate from 25% to 24% in 2022, alongside an economic slowdown and declining corporate performance, has significantly impacted tax revenues. Gu also explored innovative approaches to improve tax revenue forecasting, including AI and international collaboration.