Budget swayed by taxation… Increase in application for installment payment and increase in next year’s tax revenue

3 trillion or more of this year’s levy
Expected to pay in installments by June next year
National tax revenue also increases
Article 338 → Article 340 Amendment Discussion

The opposition and opposition parties are seeking ways to increase revenue in the 2022 budget compared to the government proposal. This is because the general real estate tax this year has increased significantly compared to last year, while tax revenues continued to rise following the economic recovery. As the size of the installment payment to divide the estate tax increases, the opposition and opposition parties are pushing for a bigger revenue next year and an increase in spending.

According to the National Assembly and the government on the 29th, the opposition and opposition parties are discussing to revise the forecast for national tax revenue from the previous 338.6 trillion won to 340 trillion won in the budget for next year. When the National Assembly revises revenue, appropriation increases because the grant tax and subsidy that are linked to revenue automatically increase. Accordingly, it is predicted that the total budget will be larger than the 604.4 trillion won submitted by the government.

The National Assembly and the government expect that next year’s tax will be lifted more than initially expected due to the economic recovery this year and the brisk asset market. Capital gains tax has increased due to the booming asset markets such as stocks and real estate, and corporate business is also showing good results. Of the total real estate tax of 8,568.1 billion won, which was notified to taxpayers this year, more than 3 trillion won is expected to be paid in installments next year, according to the ruling and opposition parties. This year, the property tax doubled from last year (4,268.7 billion won), and the housing segment property tax recorded 5,678.9 billion won, more than triple that of last year (1.814.8 trillion won).

Taxpayers who pay more than 2.5 million won can apply for the tax payment in installments between the 1st and 15th of the following month. If you apply for installment payments, you can pay a portion of the tax amount by the 15th of the next month, and the rest can be paid in installments for up to 6 months by June 15th of next year. If you pay 2.5 million to 5 million won in tax, the remaining amount will be paid in installments after deducting 2.5 million won. If the amount exceeds 5 million won, the amount of not more than 1/2 of the tax payable may be paid in installments. Last year, it is known that the amount applied for the installment tax payment accounted for about 30% of the total tax amount.

A government official said, “This year’s total property tax itself is much larger than last year, so there is a possibility that the proportion and size of the installment payment will be larger than last year. The official added, “It is not possible to know the exact situation of the taxpayer, but in some cases, the amount of the installment payment may exceed 3 trillion won.”

Some observers are also predicting that the National Assembly will reflect the additional revenue from the installment of taxation in installments in early next year, rather than modifying and reflecting it in this main budget. This is because it is difficult to provide a detailed estimate of the tax payment in installments until the National Assembly finalizes the budget, since the payment period for applying for the tax payment in installments is from the 1st to the 15th of the following month, which exceeds the legal deadline for the budget bill (December 2). The ruling Democratic Party of Korea is considering the formation of an additional supplementary budget at the beginning of next year to provide disaster relief funds for the entire nation.

Correspondent Kim So-hyun

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