South Korea’s tax revenue will increase strongly in 2025, yet it will not meet the government’s earlier forecast. The Ministry of Economy and Finance released its re-estimation and highlighted both gains and setbacks. Officials said the growth shows economic resilience, even amid challenges. However, shortfalls indicate that external factors and policy measures influence revenue. The government plans to monitor trends closely throughout the year.
The government expects to collect about 369.9 trillion won, roughly $263.7 billion. This marks an increase of 33.4 trillion won compared to last year. Despite the gain, the figure remains lower than the 372.1 trillion won forecast presented during the extra budget proposal. The revised estimate shows how currency and fiscal policies directly affect tax revenue. Analysts also note that careful planning will help address these gaps.
Officials explained why the numbers dropped. The Korean won appreciated against the dollar, reducing import-related value-added tax. The shift in the exchange rate will lower revenue by about 2.4 trillion won. Earlier, the average exchange rate stood at 1,439 won, but it later moved to 1,379 won. This fluctuation highlights the sensitivity of tax income to global currency changes.
Additionally, the government extended a fuel tax cut to ease household burdens. It also offered income tax refunds to self-employed workers, including delivery riders. These measures reduced overall revenue, despite other gains. Policymakers emphasized that supporting households remains a priority. The ministry expects such relief measures to continue influencing short-term revenue trends.
Still, income tax collection will rise significantly due to gradual economic recovery. Revenue from income tax should increase by 10.9 trillion won compared to last year. Officials highlighted stronger job markets and improved consumer spending as major drivers. Meanwhile, corporate tax revenue will also grow substantially. The ministry projects an increase of 21.1 trillion won thanks to improved corporate earnings and business performance.
Although the updated outlook falls short of initial expectations, the government emphasized growth momentum. Overall revenue will expand 9.9 percent from last year, showing resilience despite global challenges. Currency movements, targeted tax relief measures, and strong corporate earnings shape these results. Going forward, officials plan to balance fiscal policy with economic support. The government aims to sustain both household aid and overall fiscal health.
