The headquarters of the Ministry of Economy and Finance in Sejong / Yonhap

Korea's tax revenue fell by 7.5 trillion won ($5.2 billion) in 2024 from a year earlier due mainly to weak corporate activities, the finance ministry said Monday.

The government collected 336.5 trillion won in taxes last year, down from the 344.1 trillion won tallied in 2023, according to the ministry.

The tax revenue also fell short by 30.8 trillion won compared with the ministry's initial forecast in the 2024 budget plan. This follows a record shortfall of 56.4 trillion won the previous year.

The ministry had revised its forecast in September, projecting tax revenue of 337.7 trillion won for 2024. The final figure again fell short of the revised estimate.

Regarding discrepancies in tax revenue estimates, the finance ministry said it is considering involving outside experts in the evaluation process and exploring the use of artificial intelligence (AI) models.

The decline in tax revenue was largely driven by a sharp drop in corporate income tax collection, which plummeted 44.2 percent on-year, amounting to a loss of 17.9 trillion won, due to weaker corporate performance on a continued economic slowdown.

In 2023, the operating profits of companies listed on the main bourse slumped 45 percent on-year, while those of firms on the tech-heavy KOSDAQ market tumbled 39.8 percent.

In contrast, income tax revenue increased by 1.6 trillion won in 2024, driven by higher interest income tax due to rising interest rates, as well as improved employment and wage growth.

The value-added tax collected last year also went up by 8.5 trillion won from that of 2023, reflecting increased private consumption, the ministry said. (Yonhap)