NABO Fiscal Estimates & Tax Issues (Issue. 20)

Published on September 7, 2022
Published by Estimates and Tax Coordination Division

I. Fiscal Estimation & Tax Trends
 ·(Review of fiscal demand for legislative bills approved in Q2 of 2022) Of the 134 legislative bills approved in Q2 of 2022, 53 (39.6%) are subject to fiscal enforcement by state and local governments, thus their fiscal standing will be affected afterwards. Implementation of 30 bills, to which a cost estimation has been made, is expected to result in an annual expenditure increase of 1.1123 trillion won on average over the next 5 years (2022~2026).
 ·(Total revenue performance and trends in 1H of 2022) Total revenue in the first half of 2022 was 334.4 trillion won, an increase of 35.8 trillion won (12.0%) from the same period in the previous year (298.6 trillion won). This is mainly attributable to an upper trend in corporate tax revenues led by strong corporate operating performance.
 ·(Government debts and sovereign bond issuance trends in Q2 of 2022) The government debt (central government) in second quarter of 2022 was 1,007.5 trillion won, of which the balance of national treasury bonds was 910.3 trillion won, an increase of 66.8 trillion won compared to the end of 2021. In the first half of 2022, the cumulative issuance of national treasury bonds was 104.5 trillion won, and of them, the cumulative deficit-financing in general accounting was 60.0 trillion won.

Ⅱ. Fiscal Estimation & Tax Analysis
 ·(Estimation of fiscal demand due to re-establishment of roles of nursing hospitals and long-term care institutions) Changes to the benefit costs of health insurance and long-term care insurance for the elderly, in cases where inpatients in nursing hospitals move to long-term care institutions, were estimated on a trial basis.
 ·(Analysis of fiscal demand to improve transportation convenience for mobility disadvantaged persons) Fiscal demand analysis was carried out on the major bills and issues that are under review at the 21st National Assembly, with the main content being the improvement of transportation convenience for mobility disadvantaged persons.

 
Ⅲ. Estimation & Tax Issues
 ·(Main contents of tax act revisions for 2022) The tax act revision bills submitted by the government focus on improving economic vitality, stabilizing people's livelihoods, and expanding tax infrastructure. According to the Ministry of Economy and Finance, the tax revenue effect expected from the tax act revisions is estimated to be about △13.1 trillion won (cumulative △60.2 trillion won), and as of August 16, 2022, 775 tax act revisions proposed by lawmakers were pending.
 ·(Trends in the reform of the health insurance premium system) The government has implemented measures for the second-phase reform of health insurance premiums starting in September. Accordingly, the growth rate of premium income is expected to slow, and mid- to long-term measures to stabilize the health insurance finances need to be devised, considering that factors that will likely cut into premium income in the future exist.
 ·(Evaluation and analysis of management of four major public pension funds) The current status and evaluation of the management of four major public pension funds were reviewed in comparison with overseas cases.
 ·(Trend of local tax income settlement for 2011~2021) The trend of settlement of local tax income from the introduction of local income taxes and local consumption taxes following the revision of the local tax system in 2011 to 2021 was analyzed.

Ⅳ. Tax and Fiscal Indicators at a Glance
  This section consists of charts and tables visualizing tax and fiscal indicators including total expenditures and total revenue; a timeline of fiscal balance; national tax revenue, non-tax revenue, the public’s burden ratio, tax burden ratio, income tax ratio, corporate tax ratio and value-added tax ratio.