The logo of the Ministry of Economy and Finance is seen at its building in Sejong on Jan. 2. [NEWS1]

 

Korea is likely to collect more national tax revenue than expected this year, a shift that could end three years of tax shortfalls and possibly lead to a supplementary budget.

 

The government set this year’s national tax revenue target at 390.2 trillion won ($266 billion), up 18.2 trillion won from last year’s revised budget, and now expects collections to meet or exceed that amount, according to the Ministry of Planning and Budget on Sunday. 

 


 

If projections hold, the government would record an excess in tax revenue for the first time since 2023, breaking a streak of revenue gaps that continued through last year. The outlook has already revived discussion of an extra budget early in the year.

 

Corporate tax revenue stands out as the biggest upside, led by strong earnings at major semiconductor companies.

 

Samsung Electronics posted an operating profit of 20.07 trillion won in the fourth quarter of 2025 alone, marking the first time it exceeded 20 trillion won in a single quarter. SK hynix also reported an operating profit of 19.17 trillion won in the fourth quarter of 2025, up 137.2 percent from a year earlier.

 

“Improved operating profits could be partially reflected in corporate tax filings in March and also contribute to higher tax revenue through interim payments in August,” a government official said.

 

In Korea, companies do not pay corporate tax only once a year. After filing and paying corporate tax in March based on the previous year’s earnings, firms also make an interim corporate tax payment in August.  

 

The SK hynix logo appears in this illustration taken on Aug. 25, 2025. [REUTERS/YONHAP]

  

The government projected corporate tax revenue at 86.5 trillion won this year.

 

Operating profit at 639 Kospi-listed companies with December fiscal year-ends totaled 179.57 trillion won through the third quarter of last year, up 15 percent from a year earlier, according to the Korea Exchange.

 

“Given the close correlation between listed companies’ operating profit growth and corporate tax revenue, corporate tax collections this year could exceed the government’s budget estimate by 8 trillion to 9 trillion won,” said Park Jun-woo, a researcher at Hana Securities.

 

Strong corporate performance could also translate into higher income tax revenue through increased bonuses and wages. The government projected earned income tax revenue to rise by 3.7 trillion won from last year, though the actual increase could be larger.

 

Securities transaction tax revenue also looks set to rise. Average daily trading value in the domestic stock market in January reached 41 trillion won on the Kospi, up 116.9 percent from the previous month, while trading on the Kosdaq averaged 21.3 trillion won, a 52.1 percent increase. Tax rates on securities transactions rose by 0.05 percentage points on both markets starting in January, which could further lift revenue.

 

A sign of the Ministry of Economy and Finance is seen at its building in Sejong on Jan. 2. [NEWS1]

 

Additional tax revenue could ease fiscal pressure and reduce the need for issuing new government bonds, making it easier to approve an extra budget. 

 

“Based on past cases outside major crisis periods, an extra budget of about 10 trillion to 15 trillion won is feasible,” said Cho Yong-gu, an analyst at Shinyoung Securities. “The extra budget could be used to stabilize prices and livelihoods amid K-shaped growth polarization and to support administrative integration.” 

 

Others urge caution. 

 

Rising uncertainty over potential U.S. tariff measures could weigh on the outlook. If companies also increase capital investment, larger investment tax credits could offset gains in corporate tax revenue, leaving the actual increase smaller than expected.

 

“We need to get through at least the first quarter, especially March corporate tax filings, to gauge the overall trend for the year,” a government source said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY JANG WON-SEOK, KIM KYUNG-HEE [[email protected]]