South Korea Expects 2026 Tax Revenue to Surge 28% to a Record 478.6 Trillion Won
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South Korea's Ministry of Economy and Finance expects government tax revenue in 2026 to reach 478.6 trillion won, or about 353 billion dollars, up 28% from the previous year and 63.2 trillion won, or 15.2%, above the estimate used for this year's supplementary budget. The increase is driven mainly by strong profits in the semiconductor industry amid the artificial intelligence boom, special dividend payouts, and brisk stock market trading. If the estimate holds, South Korea's annual tax revenue will top 400 trillion won for the first time and come in about 21% above the previous record set in 2022, rising 104.7 trillion won from a year earlier. The higher revenue is a key factor in President Lee Jae-myung's plan to channel the benefits of chip industry growth into long-term investment. The government has proposed raising spending next year by 12.8% to 820.9 trillion won, the fastest increase on record. Under the plan, a new Future Response Fund would receive about 162.3 trillion won, of which 45.4 trillion won would support projects already included in next year's spending plan, with the remainder helping to reduce the need for new government bond issuance. The rise in tax revenue also reflects reliance on the earnings of the semiconductor industry, which is cyclical and can be highly volatile, potentially posing a risk to government revenue if the chip industry cycle slows in the future.