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South Korea may scale back tax cuts

The South Korean government is considering scaling back tax cuts aimed at curbing inflation, as tax revenue for this year is likely to fall below the estimate. The country's tax revenue fell by KRW15.7tr (USD13.2bn) to KRW54.2tr in the first two months of this year, compared to the same period in 2022. The total tax revenue for 2023 is expected to be KRW380.2tr, lower than the government's projection of KRW400.5tr. Finance Minister Choo Kyung-ho has said that the low tax revenue could lead to a disruption in state affairs. The government may end tax extensions or cut back on fuel tax reductions, with the current 37% cut for diesel possibly dropping to 25%. The government is also considering revising the 30% cut on consumption tax on the purchase of passenger vehicles, which is set to expire in June.


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