[2027 Budget] Tax Revenue to Soar to 584 Trillion Won Next Year on Semiconductor Boom

Corporate Tax Surges 114% to 216.6 Trillion Won

Tax Expenditure Tops 100 Trillion Won for First Time Ever

Tax Relief Heavily Concentrated on Large Corporations and High-Income Earners

Driven by the semiconductor supercycle, next year's national tax revenue is forecast to jump to 584 trillion won, rising by more than 40% compared to this year. In particular, corporate tax is expected to surge by nearly 114%. The scale of tax expenditures, including tax exemptions and deductions, is also set to surpass 100 trillion won for the first time in history. As deductions related to semiconductor investment and research and development (R&D) increase, the share of tax relief received by large corporations is projected to soar to half of the total.

Tax Windfall Fueled by Semiconductor Boom... Corporate Tax KRW 217 Trillion, Income Tax KRW 180 Trillion

According to the “2027 National Tax Revenue Budget Proposal” and the “2027 Tax Expenditure Statement” released by the Ministry of Economy and Finance on September 1, the government has projected next year’s national tax revenue at 584.4 trillion won, up by 168.9 trillion won (40.7%) from this year's supplementary budget (415 trillion won). The steepest increase is seen in corporate tax. With the semiconductor boom driving a sharp rise in operating profits for major companies such as Samsung Electronics and SK hynix, corporate tax revenue is expected to reach 216.6919 trillion won, which represents an increase of 115.3703 trillion won (113.9%) from this year.

Income tax is forecast to grow by 43.1943 trillion won (31.6%) to a total of 180.0122 trillion won. Due to increases in employment and wages, as well as the expansion of special bonuses at semiconductor companies, wage income tax will rise by 39.9% to 102.4446 trillion won. Stronger corporate performances and increased shareholder payouts are expected to boost dividend income tax to 13.166 trillion won, a 183.6% jump from the previous year.

Value-added tax will rise by 5.5% to 91.3711 trillion won, supported by increased private consumption. Comprehensive real estate tax is expected to grow by 34.8% to 6.2312 trillion won, and the education tax by 32% to 7.4574 trillion won.

South Korea's economy is demonstrating a clear recovery in major indicators such as growth rate, exports, and current account balance, driven by a semiconductor boom. Globally surging memory demand is leading to continued price increases for universal DRAM and NAND flash, including High Bandwidth Memory (HBM). With the rapid expansion of actual services such as AI search and on-device AI, demand for universal memory used in SSDs is also surging, suggesting that the semiconductor industry’s upward trend will continue. The photo shows the construction site of SK hynix Semiconductor Cluster Phase 1 Fab in Cheoin-gu, Yongin, Gyeonggi Province. Photo by Kang Jin-hyung

Tax Expenditures Surpass KRW 100 Trillion... Actual Fiscal Spending Nears KRW 926 Trillion

Next year's tax expenditures will increase by 17.9 trillion won to 104.9 trillion won. This marks the first time tax expenditures will exceed 100 trillion won. When combined with fiscal expenditure of 820.9 trillion won, the government’s effective outlays will approach 926 trillion won. The national tax reduction rate is expected to remain at 14.5%, staying below the legal ceiling of 16.6% for the second consecutive year.

The sharp increase in tax expenditures is mainly attributed to expanded investment and R&D tax credits resulting from the semiconductor boom. As companies improve their performance and increase their spending on facilities and R&D, the size of deductions from comprehensive investment tax credits and related relief has grown accordingly.

In particular, tax benefits are increasingly concentrated among large corporations. The tax relief share going to conglomerates subject to cross-shareholding restrictions rose from 16.0% in 2025 to 30.8% this year and is projected to expand to 49.9% next year. Meanwhile, the share for small and medium-sized enterprises is expected to decline from 70.4% in 2025 to 42.2% next year. Among individuals receiving tax relief, the proportion going to high-income earners is also set to increase.

Next year, high-income earners will account for 33.1% (18.2372 trillion won) of individual tax relief, marking an increase over this year's projected figure, while the share for middle- and low-income earners will dip slightly to 66.9%. This is attributed to the expansion of deductions related to health, employment, and pension insurance premiums.

This content was produced with the assistance of AI translation services.