‘The largest tax revenue error in history’ Ministry of Finance to improve tax revenue estimation method

Last year, the national tax revenue error reached 60 trillion won
The error rate is 20% compared to the main budget, the highest ever

[세종=아시아경제 김현정 기자] In the process of forecasting national tax revenue last year, the government, which made the largest error in history, approaching 60 trillion won, decided to improve the tax revenue estimation method.

According to the Ministry of Strategy and Finance on the 16th, the government is considering a plan to significantly expand external participation in the tax revenue estimation process. In addition to the tax office of the Ministry of Strategy and Finance, which is currently in charge of estimating tax revenue, it is reported that other offices and national governments within the Ministry of Strategy and Finance, such as the Budget Office, are also being discussed in the estimation process.

Increase participation of outside government agencies and experts. Methods such as disclosing the basis for tax revenue estimation and expanding expert advice during the estimation process are also discussed.

The research service on measures to improve tax revenue estimates ordered by the Ministry of Strategy and Finance to the Korea Institute of Taxation and Finance has also entered the final stage. Based on this, the government is planning to apply the improved estimation method from next year’s revenue budget, which is estimated in July and August of this year.

A government official said, “As there was a big error in last year’s tax revenue estimate, we need to improve (estimate method).” “We are currently reviewing all possible measures.”

The reason the government has decided to overhaul its tax revenue estimation method is because the forecast last year was significantly different. At the time the original tax revenue budget was submitted, the government’s estimate of last year’s national tax revenue was 282.7 trillion won. However, as tax revenue continued to boom thanks to the rapid economic recovery and brisk asset markets such as real estate and stocks, the government raised its estimate of national tax revenue at the time of the second supplementary budget in July of last year to 314.3 trillion won, an increase of 31.6 trillion won from the main budget.

About four months later, in November of last year, the government again announced that it was expected to receive 19 trillion won in excess tax compared to the second supplementary budget. Two months later, the government recently revised its revenue budget forecast for the third time, stating that more than 8 trillion won in excess tax revenue would be generated. As a result, last year’s revenue increased to more than 340 trillion won, and the excess tax revenue compared to the forecast at the time of the main budget was close to 60 trillion won. This shows an error rate of more than 20% compared to the main budget, and this error rate is the highest ever.

By Kim Hyun-jung, staff reporter alphag@asiae.co.kr