National tax revenue reached 164.1 trillion won (about $108 billion) in the first four months of the year, up 21.9 trillion won from a year earlier; income, corporate and value-added taxes all rose; the tax collection progress rate stood at 39.5 percent; the managed fiscal deficit narrowed by 9.5 trillion won; central government debt reached 1,321.7 trillion won

South Korea posted a record current-account surplus of more than 54 trillion won in March, driven by strong semiconductor exports. [Yonhap]
South Korea posted a record current-account surplus of more than 54 trillion won in March, driven by strong semiconductor exports. [Yonhap]

South Korea's fiscal deficit shrank sharply in the first four months of this year as a semiconductor boom lifted corporate earnings and tax revenue. The managed fiscal balance — the broadest measure of the government's fiscal health — showed a deficit of 36.6 trillion won, narrowing by 9.5 trillion won from a year earlier to its lowest level since 2019.

Total revenue for January through April reached 272.3 trillion won, up 41.3 trillion won from the same period last year, according to the June edition of the Monthly Fiscal Trends report released Thursday by the Ministry of Planning and Budget. Total expenditure rose 23.3 trillion won to 285.6 trillion won.

National tax revenue came in at 164.1 trillion won, up 21.9 trillion won from a year earlier. The tax collection progress rate against this year's budget stood at 39.5 percent, 1.3 percentage points higher than the prior-year figure.

Breaking down by tax category, income tax revenue rose 5.9 trillion won, driven by higher performance bonuses and increased real estate transactions. Corporate tax climbed 3.2 trillion won as earnings improved, particularly among semiconductor companies. Value-added tax increased 4.7 trillion won on lower refunds and higher imports, while securities transaction tax rose 3.1 trillion won on higher trading volumes and a tax rate adjustment.

Non-tax revenue rose 7.9 trillion won to 23.1 trillion won, and fund revenue increased 11.5 trillion won to 85.2 trillion won. Fund property income in particular rose 10.6 trillion won, boosted by stronger investment returns.

The consolidated fiscal balance — total revenue minus total expenditure — recorded a deficit of 13.2 trillion won. Excluding surpluses from social security funds such as the national pension, the managed fiscal balance showed a deficit of 36.6 trillion won.

That figure represents a 9.5 trillion won improvement from the same period last year, when the deficit stood at 46.1 trillion won, and is the best reading for the January–April period since 2019, when the deficit was 38.8 trillion won. It is also the eighth-lowest deficit recorded since the government began tracking the figure in 2012.

"The managed fiscal balance improved as tax revenue — led by corporate tax — increased on the back of better corporate earnings from the recent semiconductor boom," a Ministry of Planning and Budget official said. "The improved tax environment is also contributing to a modest recovery in fiscal soundness."

Government debt, however, continued to rise. Central government debt stood at 1,321.7 trillion won at the end of April, up 18.2 trillion won from the previous month and 53.5 trillion won above the end-of-last-year level.

Government bond yields rose in May amid higher interest rates in major economies and shifting monetary policy expectations. The yield on the three-year benchmark treasury bond stood at 3.731 percent at the end of May, while the 10-year yield reached 4.068 percent. Foreign holdings of South Korean government bonds increased 10.2 trillion won over the month to 323.1 trillion won.


fact0514@heraldcorp.com