This Year's Excess Tax Revenue Expected to Exceed 50 Trillion Won; Future Response Fund Likely to Surpass 200 Trillion Won Next Year

[Financial News] The government's tax revenue reassessment, which reflects the strong semiconductor industry, is expected to show that this year's excess tax revenue will exceed 50 trillion won. As a result, the total size of the Future Response Fund available for the government to manage next year could also surpass 200 trillion won.
According to relevant government ministries on the 27th, the Ministry of Economy and Finance is understood to have estimated that excess tax revenue will exceed 50 trillion won in its reassessment of 2026 national tax revenue, scheduled for release at the end of this month. This figure represents the excess calculated against the revenue forecast already raised through the revenue adjustment included in the supplementary budget approved by the National Assembly of the Republic of Korea in April.
National tax revenue under the supplementary budget was 415.4 trillion won, but annual tax revenue would rise to 465.4 trillion won under the reassessment. This would almost certainly surpass the previous record of 395.9 trillion won set in 2022, just four years later. Compared with last year's national tax revenue of 373.9 trillion won, the figure would be more than 91.5 trillion won higher.
The increase is already evident in the tax collection results released so far. The Ministry of Economy and Finance reported that cumulative national tax revenue from January through July reached 274 trillion won, up 41.4 trillion won from the same period a year earlier. The collection rate against the supplementary budget was 66.0%, 2.5 percentage points above the recent five-year average of 63.5%.
By tax category, corporate tax revenue rose by 4.4 trillion won to 51.8 trillion won, driven by improved corporate earnings. Income tax revenue increased by 12.2 trillion won to 89.3 trillion won on higher performance bonuses and real estate transaction volumes. Value-added tax revenue grew by 8.1 trillion won to 69.4 trillion won as private consumption and imports increased. Securities transaction tax revenue reached 8.2 trillion won, up 348.5% from last year, while the Rural and Fishing Villages Special Tax, linked to trading value on the KOSPI Composite Index, surged 182.5% to 13.1 trillion won.
To exceed 50 trillion won in excess tax revenue, the government would need to collect more than 191.4 trillion won over the five months from August through December. Its basis for viewing this as possible is the interim corporate tax payments by semiconductor companies, which will be reflected in tax revenue for August and September.
Although corporate tax revenue had risen by 4.4 trillion won to 51.8 trillion won by July, the interim payments due in August and September by companies with December fiscal year-ends had not yet been included. Companies belonging to disclosure-designated business groups calculate provisional first-half results and file them at the end of August. If their tax liability exceeds 10 million won, they pay it in installments over the two months through September.
Samsung Electronics and SK hynix posted cumulative operating profits of 146.7 trillion won and 98.2 trillion won, respectively, in the first half of this year. With their combined profits approaching 245 trillion won, the interim payments are expected to have a major impact on overall tax revenue.
This strong tax revenue performance will help expand the resources available to the Future Response Fund, which the government is seeking to establish. The government describes the fund as a "fiscal reservoir" designed to overcome the limitations of the single-year budget system. Its plan is to invest in young people, growth engines, regional development, and education and talent to raise potential growth, while using the fund to bolster fiscal capacity if worsening tax conditions create a shortfall.
The government's spending proposal for the Future Response Fund next year includes 45.4 trillion won in investments and a 12.5 trillion won reduction in new government bond issuance.
The fund's basic source of financing is 162.3 trillion won in "additional tax revenue." This refers to the portion of the 2027 domestic tax revenue budget that exceeds the trend line for the past 10 years, and is separate from the excess tax revenue to be calculated in the tax revenue reassessment at the end of this month. Adding even the minimum estimate of 50 trillion won in excess tax revenue this year would bring the total to 212.3 trillion won.
It has not yet been decided whether all of the excess tax revenue will be allocated to the Future Response Fund. However, because remaining funds from the fiscal surplus and returns on available funds may also be used as resources for the fund, forecasts indicate that its total will comfortably exceed 200 trillion won.
Park Hong-keun, Minister of Planning and Budget, said on the 17th that once the tax revenue reassessment results are released, the government will decide how to use the excess tax revenue in accordance with the law after internal discussions at the ministry and consultations with Cheong Wa Dae and the Ministry of Economy and Finance.
Meanwhile, the government is understood to have submitted a bill to the National Assembly of the Republic of Korea that would allow state subsidy program funds included in the local account of the Future Response Fund to be used for up to three years, through the fiscal year after next. If the bill is finalized as drafted, eligible funds among the 2027 local-account subsidies could be spent over three years, through 2029.
Of the 131 net expenditure programs under next year's Future Response Fund, 125, or approximately 95% by number, were included in the budget as originally requested by the ministries or were added or increased. Only six programs received cuts from the amounts requested by the ministries.

[email protected] Lee Hwan-joo Reporter