Data released by the South Korean government on Wednesday shows that, driven by the semiconductor industry's "super cycle," South Korea's tax revenue this year is expected to reach a record 478.6 trillion won (about 353.7 billion U.S. dollars).

According to South Korea's Ministry of Economy and Finance, this figure is an increase of 104.7 trillion won from the previous year's 373.9 trillion won. Previously, the highest record for South Korea's tax revenue was 395.9 trillion won in 2022.

This revised estimate is 88.4 trillion won higher than the initial forecast made when the South Korean government prepared the 2026 budget.

A South Korean finance ministry official said: "Affected by the semiconductor industry boom and a stronger stock market, tax revenue has far exceeded initial expectations, and both of these conditions were previously difficult to predict." The official added: "Operating profit in the chip industry was about 70% to 80% higher than initially expected."

South Korea's finance ministry said it expects corporate income tax revenue this year to reach 136.4 trillion won, an increase of 51.8 trillion won from the previous forecast.

The market currently expects that Samsung Electronics Co., Ltd. and SK Hynix will record combined operating profit of about 638 trillion won this year, compared with the February forecast of 339 trillion won.

Driven by large bonuses paid by semiconductor and financial companies, the South Korean government expects personal income tax revenue this year to reach 152.4 trillion won, higher than the previous forecast of 132 trillion won.

Thanks to the strong performance of the stock market in the first half of this year, securities transaction tax revenue is expected to reach 12.4 trillion won, while the initial estimate was only 5.4 trillion won.

Experts pointed out that, based on the revised estimates, the "Future Fund" the government plans to establish next year is expected to receive more than 200 trillion won in funding; the fund aims to transform the huge tax gains brought by the semiconductor industry boom into a sustainable driving force for economic growth.

The calculation is based on an estimated tax surplus of 56.2 trillion won and 162.3 trillion won in "windfall revenue."

A South Korean finance ministry official said: "The 'Future Fund' bill submitted to the National Assembly stipulates that surplus revenue can be transferred into the fund." He also noted that relevant departments are discussing how to use the surplus.

South Korea previously introduced the concept of "windfall revenue," referring to tax revenue that exceeds the long-term trend because of structural economic changes or major economic fluctuations, such as an industrial "super cycle."

The South Korean government pointed out that this concept is different from a "tax surplus"; the latter refers to a situation in which actual tax revenue exceeds the official forecast because of unexpected short-term economic fluctuations or forecast errors.