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South Korea reports second annual budget surplus in 2016, will pay down debt
[SEOUL] South Korea reported a substantial second straight budget surplus in fiscal year 2016, thanks to a rise in tax revenue, government figues showed on Friday.
Total gross revenue for last year was 345.0 trillion won (S$425.6 billion) while expenditures amounted to 332.2 trillion won, the Ministry of Strategy and Finance said in a statement.
rFrom the 12.8 trillion won left from the revenue after expenditures, 4.8 trillion won will be carried over to be used in 2017, resulting in an 8.0 trillion won surplus.
Most of that surplus will be used to pay back debt and other liabilities.
In 2015, the budget surplus was 2.8 trillion won.
Of the total revenue collected in 2016, tax income was at 242.6 trillion won, up 24.7 trillion won from 2015 and overshooting the government's target by 9.8 trillion won.
The government saw 102.4 trillion won in non-tax income last year, down 7.8 trillion won from 2015 and standing 6.8 trillion won below the government's target.
The surge in tax revenue was largely from value-added tax (VAT) and corporate tax, which respectively rose 12.8 per cent and 15.7 per cent in 2016 versus 2015.
The increase in VAT was mainly from increased consumption while exports and corporate investments remained sluggish, the finance ministry said. Corporate tax revenue benefited from factors including better business performance.