The National Tax Service (NTS), the overarching authority for national tax revenue, has a total of 140 tax offices under its jurisdiction, including its headquarters in Sejong City and seven regional tax offices. Each of these tax offices has a unique role to play in the collection of tax revenue based on factors such as the local population and economic strength.
At the end of December 2021, the NTS collected 334 trillion won in tax revenue, and the question on everyone’s mind was which of the 130 tax offices generated the most revenue. To the surprise of many, it was not one of the 28 tax offices under the Seoul District Tax Office, but the Suyeong Tax Office.
The Suyeong Tax Office is part of the Busan Regional Tax Office and covers Suyeong-gu and Nam-gu in Busan, South Korea’s second largest city. In 2021, the Suyeong Tax Office generated an impressive 20.3246 trillion won in tax revenue, making it the highest-earning tax office among all 130 tax offices in the country. This is the second year in a row that the Suyeong Tax Office has taken the top spot, having collected 17.146 trillion won in 2020.
The secret to its success lies in the presence of the Korea Securities Depository(KSD), which pays securities transaction tax and rural special tax on stock transactions. In 2021, the Suyeong Tax Office’s share of these taxes reached 74.8% (15.218 trillion won), and in 2020, it was 70.4% (12.517 trillion won). According to the National Tax Service’s National Tax Statistics Portal, the Suyeong Tax Office collected 20.3247 trillion won in 2021, making it the leader in tax revenue for the second consecutive year.
In second place was the Namdaemun Tax Office in Seoul, which collected 18.23 trillion won in taxes. This was largely due to the presence of the Bank of Korea, financial institutions, and the headquarters of several large companies, resulting in more than 10 trillion won collected in corporate taxes alone. The Namdaemun Tax Office held the top spot for tax revenue in 2018 and 2019, but was overtaken by the Suyeong Tax Office in 2020, which capitalized on the stock market boom.
In third place was the Yeongdeungpo Tax Office, which collected 12.497 trillion won. This tax office has consistently performed well, thanks to the large number of financial companies located in Yeouido.
Fourth place went to the Ulsan Tax Office, which collected 10.695 trillion won in taxes. This was primarily due to transportation, energy, and environmental taxes and education taxes paid by refineries and automobile factories in the region, which accounted for 89.6% (9.58 trillion won) of the total tax revenue.
So, how could the Suyeong Tax Office, located in a relatively small area of Busan, outperform tax offices in areas with major companies like Samsung and LG? The answer lies in the relocation of the Korea Securities Depository to Nam-gu, Busan in 2014, as part of the government’s plan to decentralize public institutions. Since then, the Suyeong Tax Office has seen a significant increase in tax revenue, rising from over 1 trillion won to 20.3247 trillion won in 2021.
However, it is important to note that the tax revenue collected by the Suyeong Tax Office is subject to significant volatility. This means that its revenue is heavily influenced by the activity of the stock market, and a boom in stock trading can lead to a significant increase in tax revenue, while a downturn in the market can result in a significant decrease. Despite this, the Suyeong Tax Office remains a national leader in tax revenue, having consistently outperformed its peers year after year.
The success of the Suyeong Tax Office serves as an example of how the presence of key institutions and industries can have a major impact on the local economy. By attracting these institutions to a region, the government can help spur economic growth, create jobs, and increase tax revenue.
While the future of the stock market remains uncertain, it is clear that the Suyeong Tax Office will continue to play an important role in the collection of tax revenue for the National Tax Service. The government will be closely watching the activity of the Suyeong Tax Office, and other tax offices around the country, to ensure that they are effectively collecting tax revenue to support the needs of the nation.
