South Korea's corporate tax revenue is set to overtake income tax next year for the first time in 15 years, lifted by a semiconductor boom.
Corporate tax revenue will reach 216.7 trillion won ($156 billion) next year, topping 200 trillion won for the first time, according to the Ministry of Economy and Finance's national tax revenue budget released on the 14th. That is 36.7 trillion won more than the 180 trillion won projected for income tax. The jump reflects higher operating profit at chipmakers including Samsung Electronics and SK hynix, combined with the effect of a 1 percentage point increase in corporate tax rates across all brackets that took effect this year.
It is the first time since 2012 that corporate tax has exceeded income tax. That year, corporate tax revenue came to 45.9 trillion won, or 100 billion won more than income tax. Corporate tax revenue rose from the 40 trillion won range in 2012-2015 to the 70 trillion won range in 2018-2019, then fell to 55.5 trillion won in 2020. It climbed to 103.6 trillion won in 2022 but plunged to 80.4 trillion won in 2023 and 62.5 trillion won in 2024 amid a chip downturn, leaving a large revenue shortfall.
Corporate tax revenue recovered to 84.6 trillion won in 2025 and 101.3 trillion won this year on a supplementary budget basis, and is projected to more than double next year.
Income tax, by contrast, has grown steadily on rising prices, a larger workforce and higher asset prices. It rose from the 40 trillion won range in 2012-2013 to more than 100 trillion won in 2021, reaching 130.5 trillion won in 2025 and 136.8 trillion won this year, before an expected 180 trillion won next year. Value-added tax revenue is projected at 91.4 trillion won next year.
Because exports and growth rely heavily on semiconductors, tax revenue swings with the industry cycle. The projection that corporate tax revenue will more than triple to 216.7 trillion won in just three years from 62.5 trillion won in 2024 illustrates that volatility.
A large revenue shortfall during a downturn can disrupt budget execution and weaken policy capacity. Deciding how to use revenue that exceeds expectations is also a challenge.
The government plans to use a new Future Response Fund as a fiscal stabilization mechanism to cope with revenue swings.
