Local tax revenue in South Korea reached a record high of 121 trillion won last year, but its proportion of total tax revenue remains relatively low at 24.4%.
Last year's local tax revenue in South Korea reached 120.9 trillion won, marking the highest amount to date. Despite this record revenue for local government, the share of local taxes in total tax revenue only accounted for 24.4% due to significant increases in national tax revenues during the same period. According to the Ministry of Interior and Safety, local tax revenue is projected to be about 120.9 trillion won in 2025, an increase of about 6.0% from 114.1 trillion won in the previous year.
The Ministry stated that the increase in local tax revenue was driven by rising real estate transactions and improvements in corporate performance. The largest contribution came from acquisition tax, property tax, and vehicle taxation, which totaled about 27.5 trillion won, up 1.6 trillion won from the previous year. Additionally, local consumption tax, which is a portion of the national value-added tax, climbed to 26.8 trillion won, showing an increase of 900 billion won. On the other hand, revenues from registration license tax and tobacco consumption tax experienced slight declines.
Furthermore, the Ministry of Strategy and Finance reported that national tax revenue is expected to increase by 11.1% to 373.9 trillion won in 2025, compared to 336.5 trillion won the previous year. The proportion of local taxes in the total tax revenue, which combined local and national taxes reaching 494.8 trillion won, decreased from 25.3% in 2024 to 24.4%. The South Korean government has set a goal to increase the share of local taxes to 30% as part of its national agenda, and a joint task force under the Prime Minister's Office is currently discussing specific measures for this fiscal decentralization effort.
