▲ Gyeonggi Provincial Government Complex
Gyeonggi Province is projected to see its provincial tax revenue fall short of initial expectations by more than 350 billion won this year.
With over 300 billion won in project budgets already excluded from the initial budget due to a lack of funds, there are growing concerns that the province's financial difficulties will only worsen.
According to Gyeonggi Province on July 6, the total provincial tax collected in the first half of this year amounted to 7.1339 trillion won.
This figure represents 44.4% of the total annual collection target of 16.0633 trillion won.
In the case of acquisition tax, which accounts for more than half of the provincial tax revenue, 3.8967 trillion won was collected, reaching 47.8% of the target (8.151 trillion won).
This is 2.2 percentage points lower than the 50% collection rate expected for the six-month period.
Provincial tax consists of acquisition tax, registration and license tax, leisure tax, local consumption tax, local education tax, and regional resource facility tax. Excluding acquisition tax, the remaining tax revenues are expected to be close to their targets, considering the collection periods (for instance, the regional resource facility tax is collected from July to September).
If the trend of acquisition tax collection from the first half of the year continues through the second half, the total tax revenue shortfall for this year will exceed 350 billion won.
Previously, Gyeonggi Province had a total of 3.8317 trillion won in self-planned project budgets, but 313.2 billion won could not be included in the initial budget due to a lack of funding.
As a result, there are many essential projects for which only nine months of funding were allocated instead of the full 12 months.
The province had intended to secure the unallocated budget through a supplementary budget.
Ultimately, the province must now cut existing project costs to cover a total of approximately 660 billion won, combining the 350 billion won tax shortfall and the 313.2 billion won in unallocated budget.
Furthermore, considering the budget for Governor Choo Mi-ae's campaign pledges, additional restructuring of expenditures appears inevitable.
A Gyeonggi Province official stated, "We will reduce non-essential project costs across each department and bureau to submit a supplementary budget proposal to the provincial assembly's extraordinary session in September," adding, "We have already notified the departments of the scale of project cost reductions and will proceed with discussions soon."
(Photo: Courtesy of Gyeonggi Province, Yonhap News)
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