South Korea's national tax revenue this year is expected to come in 63.2 trillion won higher than projected at the time of the supplementary budget, driven by a semiconductor boom and a stock market rally that simultaneously lifted corporate tax, income tax, the securities transaction tax and the special rural development tax. The error rate against the final budget, which reflected the supplementary budget, was 15.2% — the fifth-largest on record and wider than the -14.1% gap recorded during the large revenue shortfall of 2023.
The Ministry of Finance and Economy released the "2026 National Tax Revenue Re-estimate" on the 30th. The government now puts this year's national tax revenue at 478.6 trillion won, an upward revision of 63.2 trillion won, or 15.2%, from the 415.4 trillion won projected in the March supplementary budget. The figure is 104.7 trillion won higher than the 373.9 trillion won actually collected last year and 88.4 trillion won above the 390.2 trillion won forecast in the original budget. The ministry said cumulative national tax revenue through August reached 329.9 trillion won, up 69.1 trillion won from a year earlier.
Semiconductors drove the surplus, with more than half of the total increase coming from corporate tax. At the time of the supplementary budget, the government expected 101.3 trillion won in corporate tax, but successive upgrades to earnings forecasts at chipmakers including Samsung Electronics and SK hynix pushed the re-estimate up 35 trillion won in six months to 136.4 trillion won. Market forecasts for the two companies' combined operating profit this year have nearly doubled to 638 trillion won from 339 trillion won when the supplementary budget was drawn up.
Forecasts for the two companies' first-half operating profit, which serves as the basis for interim corporate tax payments, also rose 67% over the same period to 244.8 trillion won from 146.6 trillion won. Corporate tax collected in August alone rose 23.8 trillion won from a year earlier, and a substantial share of already-filed tax will arrive in installments in September and October. Kim Byung-chul, director general for tax policy at the Ministry of Finance and Economy, said the remaining corporate tax consists only of installment payments on amounts filed in August for first-half operating profit and withholding tax, so there is little chance of a significant deviation from the re-estimate.
The chip boom also lifted income tax, which is now seen at 152.4 trillion won, up 15.6 trillion won from the supplementary budget. Larger bonuses in the semiconductor and financial sectors are expected to add 4.4 trillion won in wage income tax, while Samsung Electronics' special dividend and similar payouts are projected to add 3.9 trillion won in dividend income tax. Capital gains tax from increased housing transactions accounts for another 6.2 trillion won.
The stock market rally pushed revenue higher as well. The securities transaction tax is projected at 12.4 trillion won, 1.9 trillion won above the supplementary budget, while the special rural development tax is seen at 20.3 trillion won, up 6.7 trillion won. Average daily trading value, which directly affects securities-related revenue, soared from 30.8 trillion won in the second half of last year to 106.2 trillion won in May this year. It has since trended lower, at 66.3 trillion won in July and 49.6 trillion won in August, and the government based its re-estimate on the assumption that trading value holds at normal levels. That leaves revenue vulnerable to wide swings depending on market conditions.
The 15.2% error rate against the final budget, which reflected the supplementary budget, was the fifth-largest ever. Only four years saw wider gaps: 1950 at 21.5%, 1988 at 17.6%, 2000 at 16.6% and 1989 at 15.3%. The error rate during the large revenue shortfall of 2023 was -14.1%.
The government pointed to the difficulty of forecasting the semiconductor cycle as the reason for the gap. Kim said revenue estimates cannot be separated from economic forecasts, explaining that when the market's outlook for corporate earnings shifts, revenue projections must shift with it.
No decision has been made on how much of the surplus will be transferred to the future response fund. The government said relevant ministries are still discussing the scale and method of its use.
Some observers say South Korea's heavy reliance on volatile revenue sources such as semiconductors and the stock market makes large forecasting errors structurally likely, and that the country needs a monitoring system that recalculates revenue projections as economic conditions change. The government has begun re-estimating the current year's national tax revenue each September and reporting it to the National Assembly, but critics argue the official re-estimate cycle should be more frequent.
