FY 2021 Total Revenue Settlement Analysis

Published on August 16, 2022
Published by Estimates & Tax Coordination Division

   Total revenue for FY 2021 was KRW 570.5 trillion, up KRW 91.7 trillion YoY, and it exceeded the 2021 supplementary budget by KRW 56.0 trillion. Increase in total revenues is mainly attributable to the rise in tax revenue of KRW 58.5 trillion YoY on the back of improved business performance following the global economic recovery and up-trending of asset-related tax revenues, etc.; and boosted revenue from funds by KRW 29.6 trillion YoY, thanks to the uptick in investment returns, etc.
   In the midst of increasing volatilities in economic factors such as prices, interest rates, exchange rates, as well as internal and external economic uncertainties, there exists a potential contraction of tax revenue in the future should the Korean economy experience a slow-down in its growth momentum.
   With the above circumstances factored in, this report was prepared with an aim to present implications for this year's fiscal management as well as next year's tax revenue budget bill deliberation through the settlement of total revenue for FY 2021 submitted by the Administration. As such, the report consists of three chapters as follows: Chapter 1 provides an overview of total revenue for FY 2021. In Chapters 2 and 3, total revenue in 2021 was analyzed by detailed tax items and non-tax revenue. First, analysis of tax revenue in Chapter 2 sheds light on the causes of increase or decrease in tax revenue; the causes and issues of large-scale tax revenue errors; the impact of the expanded penetration of eco-friendly vehicles on tax revenues; tax arrears issues; and tax information provision issues. In Chapter 3, in-depth analysis of non-tax revenue by item and settlement of eight major social insurances was conducted; the problem of sovereign bond issuance exceeding the sovereign bond issuance limit pursuant to the general rules for budget management is presented; the need to improve the rationality of budgeting for non-tax revenue is raised; and utilizing the latest results when budgeting the BOK’s earned surplus is proposed.