South Korea aimed to cut the ratio of national debt to gross domestic product (GDP) below 30 percent by 2016 by turning the fiscal balance into a surplus, the Finance Ministry said Wednesday.
According to the report on fiscal management for the 2012-16 period submitted by the Ministry of Strategy and Finance to the National Assembly, the ministry planned to achieve the balanced budget in 2013 and maintain it by 2015 before turning the balance into a surplus in 2016.
Helped by the balanced budget plan, the national debt to GDP ratio will be lowered below 30 percent within the five-year period, according to the ministry. The ratio reached 35.1 percent in 2011.
The ministry warned that total national income, including tax revenue and non-tax income, was expected to fall due to slower- than-expected economic recovery. In late June, the Finance Ministry cut its outlook for the country's 2012 real GDP growth to 3.3 percent from the previous 3.7 percent, while revising down the outlook for the 2013 figure from 4.5 percent to 4.3 percent.
However, the ministry said that it will step up efforts to make up for the decrease by selling government-owned properties and equities, reviewing the current tax incentives and adopting performance-based budgeting. It also planned to increase tax transparency with the income reporting system for the high income self-employed and the mandatory issuance of electronic receipts.