Gov't Fails to Balance Books as Tax Revenues Plunge

Korea racked up a W83 trillion fiscal deficit in the first half of this year due to declining tax revenues (US$1=W1,316).

The government originally expected only a W58.2 trillion deficit for the whole year, but according to the Ministry of Economy and Finance on Thursday, tax revenues totaled just W178.5 trillion during the first six months, down W39.7 trillion from a year ago.

The reason was that real estate sales shrank while corporate earnings were lackluster, resulting in an W11.6 trillion decline in income tax and a W16.8 trillion drop in corporate tax over the period.

The government's first-half expenditures also fell W57.7 trillion from a year to W351.7 trillion, but that was not enough to balance the books.  

But considering that last year saw two supplementary budgets of W39.9 trillion and W11.2 trillion subsidies to provincial governments, other expenditures did not change much.