RECORD-LOW TAX REVENUE

RECORD-LOW TAX REVENUE

[Anchor Lead]
The government has announced an expected shortfall of over 59 trillion won in this year's tax revenue, largely due to an economic downturn impacting business performance and corporate tax contributions.

[Pkg]
The government expects to collect 400.5 trillion won in taxes this year.

[Soundbite]
Chung Jung-hoon (Then-Finance ministry tax policy director (Aug. 2022)): Earned income tax and VAT will increase in line with economic growth. Corporate tax and composite income tax are expected to be similar as 2022.

Counter to the government forecast, the amount of taxes in 2023 recorded just 341.4 trillion won. That's 59.1 trillion won, or 15 percent, less than the target amount and the largest-ever tax revenue shortfall. The main reason is corporate tax. As companies' operating incomes plummeted due to the economic slowdown that began in the fourth quarter of 2022, tax revenues decreased by more than 25 trillion won. The semiconductor sector bore the brunt. SK Hynix paid zero won in corporate tax, while Samsung Electronics, which used to pay 4 trillion won, paid only 120 billion won. The amount of capital gains tax shrank by more than 12 trillion won due to a plunge in real estate transactions stemming from the sluggish property market. VAT fell by more than 9 trillion won. This year's actual tax revenues fell short of the government's forecast by a large margin, recording a double digit error rate for three consecutive years. The government blames hard-to-predict economic fluctuations for the error.

[Soundbite]
Chung Jung-hoon (Tax & Customs office, Finance Ministry): The U.S. and Japan, as well as other major economies, are facing sharp drops in tax revenues because of the global slump.

With tax revenues falling by over 59 trillion won, local governments and education offices will receive 23 trillion won less in public tax funds that should be allocated to them by law.

TACKLING TAX SHORTFALL

[Anchor Lead]
Facing an unprecedented shortfall in tax collection this year, the government is grappling with the challenge of securing funds for its pre-allocated budget. Instead of incurring debt through issuing state bonds, the government plans to tap into managed state funds and utilize any remaining, unspent budget to cover the deficit.

[Pkg]
The easiest way to make up for tax revenue shortfall is collecting more tax or borrowing money, that is by incurring debt. However the government says there will be no supplementary budget for the purpose of issuing additional state bonds. Instead, it will make use of over-collected taxes and unused budget and borrow some 24 trillion won from a public fund management account which collects surplus funds from various state funds. State funds are funds gathered for a specific purpose and comprise of revenue from sources such as the lottery and movie ticket sales and electricity fees. Out of 68 such funds in existence, the government will mobilize 20 trillion won from the foreign exchange stabilization fund. This particular fund, used in buying and selling the US dollar to stabilize the exchange rate, in recent days saw a sharp injection of the local currency with the continued sale of the greenback aimed at easing the rising won-dollar exchange rate. The government plans to use the surplus Korean won stacked in this fund. There's concern that taking money out of the fund may weaken the response capacity to foreign exchange market changes but the government assures funding remains sufficient.

[Soundbite]
Shin Jung-beom (Ministry of Economy and Finance): The fund will still possess enough capacity to serve its purpose of stabilizing the forex market. Next year, forex stabilization bonds will be issued.

However plans to make up for the largest ever tax revenue shortage only through government discretion still face criticism. Critics say such plan violates fiscal monitoring rights held by parliament.

[Soundbite]
Prof. Ryu Deock-hyun (Chung-Ang University (Sept. 7)): Tax revenue discrepancy restricts fiscal operations but also raises concerns over the fiscal rights between administrative and legislative branches.

Borrowing money from the foreign exchange stabilization fund has precedent as some 2.8 trillion won was used in 2020 to provide cash handouts to the public during the pandemic. But with the amount being so much larger this time, controversy is expected to persist.

YOON ARRIVES IN NEW YORK

[Anchor Lead]
Arriving in New York Monday for the U.N. General Assembly, President Yoon Suk Yeol held talks with the leaders of Sri Lanka, the Czech Republic and Denmark and urged support for South Korea's bid to host the 2030 World Expo, whose winning city will be decided in a vote in late November. Yoon will give a keynote speech at the U.N. General Assembly on Wednesday local time and convey Seoul's stance on military cooperation between North Korea and Russia and how South Korea will contribute to global security issues.

STATS MANIPULATION ISSUE

[Anchor Lead]
The political arena is heating up following the Board of Audit and Inspection's claims that the former Moon Jae-in administration allegedly manipulated statistics including real-estate prices. The ruling party implies that even former President Moon could be held accountable, while the opposition condemns this as a 'biased audit' aimed at tarnishing the reputation of the previous government.

[Pkg]
The Board of Audit and Inspection says the former Moon Jae-in administration manipulated housing prices and income statistics by pressuring the Korea Real Estate Board and Statistics Korea. The BAI has requested prosecutors to investigate 22 officials including former senior CheongWaDae officials, such as ex-presidential chief policy adviser Jang Ha-sung, and public servants from the land ministry and Statistics Korea.

[Soundbite]
Choi Dal-young (Board of Audit and Inspection (Sept. 15)): The probe has found that Statistics Korea was ordered to make false announcements in line with CheongWaDae's stance.

The People Power Party has blasted the former government for committing what it called shocking wrongdoings. It's demanding that those responsible be punished regardless of their status.

[Soundbite]
Yun Jae-ok (Floor Leader, People Power Party): Their sham policies created the inequality. Those who forged statistics to cover up the mess must be punished regardless of their status.

The PPP's Kweon Seong-dong says manipulating statistics is similar to forging students' test results or committing accounting fraud. The PPP's Ha Tae-keung is demanding that former President Moon Jae-in apologize responsibly. The Democratic Party claims the BAI's probe was manipulated and aimed at breaking the political impasse. The BAI says the Moon administration manipulated statistics on household incomes from the second quarter of 2017. The DP argues there was no reason for the administration to do so only two months after taking office, especially considering that the data in question was scheduled to be discontinued the following year.

[Soundbite]
Kwon Chil-seung (Senior spokesperson, DP): Claiming that statistics, slated to end in 2018, were manipulated shortly after the gov‘t took office in second quarter doesn't make sense.

The unionized officials of Statistics Korea also blasted the BAI for what it called its politically motivated probe, saying it's passing the blame to innocent working-level officials.

RAILWAY UNION ENDS STRIKE

[Anchor Lead]
Although railway operations have resumed following a four-day strike by the Korean Railway Workers' Union, significant differences persist between the union and management. The union warns of an indefinite strike if demands, such as the introduction of the KTX service to Suseo, aren't met. While a date hasn't been set, a potential strike around the Chuseok holiday seems unlikely.

[Pkg]
After worrying about the possible cancellations of their train rides, passengers are relieved at the news that unionized railway workers ended their strike.

[Soundbite]
Park Seul-ki (Daegu resident): I worried if I had to stay a night in Seoul. But when I checked the app and there were seats, I bought a ticket.

The Korean Railway Workers' Union ended their four-day strike and returned to work from 9 a.m. on Monday. KTX high-speed trains and subway trains running in the capital region were operating at 90 percent of normal levels. It is now fully back in operation. However, the transport ministry is refusing to accept the union's demand for the introduction of KTX bullet trains bound for Suseo and the subsequent integrated operations of KTX and SRT trains. The ministry stands by the government policy of maintaining a competitive system and expressed, it is non-negotiable.

[Soundbite]
Baek Nam-hee (Korean Railway Workers' Union): Suseo-bound KTX trains should be operated for citizens. The union will stage a second strike if the ministry doesn't change its stance.

There is a possibility that the two sides will hold additional negotiations before the end of the week. But the union is considering staging an indefinite strike if the talks collapse. Even if they were to stage another strike, it is likely to take place after the Chuseok holidays. This is because it is burdensome both for management and labor if a strike is held during the holidays when demand for domestic travel soars.

[Soundbite]
Han Moon-hee (CEO, KORAIL (Sept. 17)): Since the union is not ignoring the people's inconveniences, I expect that there will be no second strike before Chuseok holiday.

The railway workers' union will decide within this week on whether or not to stage another strike.

DP LAWMAKER LOSES SEAT

[Anchor Lead]
The Supreme Court on Monday upheld a suspended prison sentence for main opposition Democratic Party lawmaker Choe Kang-wook who stood trial for issuing a false internship certificate to the son of former Justice Minister Cho Kuk. With the eight month sentence suspended for two years finalized by the top court, Choe immediately lost his parliamentary seat. He was indicted on charges of interference with graduate school admissions affairs by issuing a false internship certificate to Cho’s son in October 2017 when he was working as a lawyer at a law firm.

TANGERINES TREATED WITH GAS

[Anchor Lead]
As the Chuseok holiday approaches, there's a surge in Jeju tangerine prices. However, in a recent crackdown, authorities in Jeju have uncovered a dubious practice where tangerines were artificially ripened using gas at a sorting facility, deceiving consumers. The volume of these falsely matured tangerines reached an alarming 17 tons.

[Pkg]
Inside a green house, plastic boxes filled with greenish unripe tangerines are piled up. Dozens of ethylene gas sprays are found near tangerine boxes. It is a substance used to force tangerines to ripen. The gas was sprayed on over 17 tons of tangerines that were covered with vinyl. If tangerines are colored artificially, their freshness deteriorates rapidly. So the Jeju provincial government bans the use of the gas.

[Soundbite]
(Pack-house official (VOICE MODIFIED)): Everyone uses it. Tangerines are not sold unless they are yellow. We can't earn money.

The Seogwipo city government plans to discard all of the gas-treated tangerines and slap a fine of up to 10 million won on violators. Last week, the Jeju government found a farm harvesting 1.2 tons of tangerines with substandard sweetness. All of the tangerines were discarded. 25 tons of low-quality tangerines were found to have been sent to market this month alone. Over 55 tons were discovered to have been shipped to wholesale markets in other regions outside of regulated channels. Farmers eyed a business boom, as tangerine prices rose over 20 percent recently and are moving to jump further with the Chuseok holiday approaching.

[Soundbite]
Lee Chang-young (Jeju Municipal Police): Through stern measures, we will do our best to prevent the distribution of substandard tangerines in and out of Jeju.

In order to protect innocent tangerine farmers, the Jeju government is stepping up crackdowns on offenders by conducting sudden on-site inspections on farms and using drones.

SUICIDAL MAN SAVED

[Anchor Lead]
Amid rising concerns over indiscriminate crimes making many wary of strangers, there are still glimmers of hope. Today, we highlight the heartwarming actions of two young individuals who intervened to avert a potential tragedy with a stranger.

[Pkg]
After wandering around a street, a man in his 40s enters a store, seemingly determined. With his hands in his pockets, he has a stern look on his face. Lee Yoon-chae, an employee of the store, was put on alert when the man entered.

[Soundbite]
Lee Yoon-chae (Store employee): His hands were in his pockets. Because of what's been in the news, I had a bad hunch.

However, the 28-year-old was caught off guard by what the man said.

[Soundbite]
Lee Yoon-chae (Store employee): He asked me if I could help him, saying he wanted to die.

The man soon began crying. Sitting on a staircase together, Lee calmly listened to the man. He called for help and then continued to talk with this distraught customer until police arrived. When police got to the scene, the man hugged Lee tightly.

[Soundbite]
Lee Yoon-chae (Store employee): It seemed he had no one to comfort him. He really needed someone who would console him.

After arriving at the police station, the man could not keep himself steady and stumbled. After hearing that he had starved for days, 29-year-old police officer Kim Soo-jin first bought him instant noodles. He then began telling his story.

[Soundbite]
Kim Soo-jin (Police officer): He said he had not eaten for three days. It was heart-breaking to watch him in tears.

He became handicapped due to an injury he sustained in the military. He also talked about his difficult marriage and financial hardships. The man had decided to commit suicide. But after talking for some two hours, he agreed to receive inpatient medical treatment.

[Soundbite]
Kim Soo-jin (Police officer): I understand it is hard to approach a stranger. But it would be better if we could help those crying in pain.

On the verge of giving up on his life, what the man needed most was someone who would hear him out and listen to his story.