In 2014, the South Korean economy experienced a slight recovery, with its growth rate rising from 2.9% of the previous year to 3.3%. However, due to unfavorable factors including the Sewol Ferry accident and the global economic downturn, the total revenue of the fiscal year 2014 recorded 356.4 trillion won, marking a large-scale deficit of △12.9 trillion won compared to its budget (369.3 trillion won).
  While national tax revenue increased by 1.8% from the previous year, only 205.5 trillion won was collected, which was short of the budget of 216.5 trillion won by 10.9 trillion won (△5.1%). The 1.8% growth rate slightly improved compared to 2013's low growth rate (△0.5%), but it was not as high as the budget increase rate (7.6%).
  Non-national tax revenue reached 150.9 trillion won, which was short of the budget of 152.8 trillion won by 2.0 trillion won (△1.3%). Non-tax revenue was less than the budget of 27.3 trillion won by 2.6 trillion (△9.7%, 0.6 trillion won and 2.0 trillion won from general and special accounts, respectively), and fund revenue was in excess of the planned 125.6 trillion won by 0.7 trillion won (0.5%). Non-national tax revenue slightly increased by 0.9 trillion won (0.6%) from that of the previous year, with the collection of treasury loan and sublease loan increasing significantly by 3.7 trillion won (3.0%) while the non-tax revenue of both general and special accounts decreased and other items of fund revenue all showed deficits.
  The recent economic/social environmental changes are the major reason for the low growth rate of national tax revenue. The growth rate slowdown and the continuous trend of low inflation will continue to limit the natural increase of tax revenue, and the trend of the changing industrial structure, the expanding gap in profitability among corporations and the declining effective corporate tax rate imply the potential for the continued weakening of the revenue base. The intensified concentration of the tax burden brought about by the recent income tax reform and the shrinking tax revenue base caused by the bisection of the labor market suggest potential limitations of the sources of tax revenue and the tax system that we have relied on in supporting the predicted fiscal demand going forward.
  As a result, while efforts to improve the structure of the South Korean economy are urgently needed, it is necessary to focus the taxation policies on the efforts to expand the taxation foundation including through the reduction of various tax expenditures based on the discussion on sustainable welfare and an appropriate tax-bearing level. As a continued large-scale tax deficit undermines trust in government policies, the fiscal authority is required to fundamentally re-establish the framework of fiscal management to ensure that the tax deficit, which has been posted for the third consecutive year this year, does not continue. The government should actively accept opinions from various circles while making efforts to secure objectivity in its outlook to improve the forecast capability on the economy and tax revenue. Furthermore, the National Assembly should actively reflect any important changes taking place after the submission of the government plan, including adjustments of the growth rate and changes in tax conditions, in the budget examination through reinforcing the screening process of the revenue budget.