South Korea's tax revenue increased 10.8 trillion won ($8.8 billion) in January from a year earlier amid the economic recovery and the collection of deferred taxes over the pandemic, the finance ministry said Thursday.

The government collected 49.7 trillion won in taxes in January, compared with 38.8 trillion won the previous year, according to the Ministry of Economy and Finance.

The higher tax revenue came as the South Korean economy is on a recovery track and the government collected deferred taxes after it permitted pandemic-hit merchants last year to put off the payment of value-added taxes.

In January, the country's total revenue, including tax collections, amounted to 65.3 trillion won, up 8 trillion won from a year earlier, the ministry said.

Its gross expenditures came to 56.3 trillion won, up 2.4 trillion won from a year ago.

As a result, the country posted a fiscal surplus of 9 trillion won in January, up 5.6 trillion won from a year earlier.

The managed fiscal balance, another key gauge of fiscal soundness calculated on a stricter term, logged a surplus of 6.6 trillion won in the month, compared with a deficit of 1.8 trillion won a year earlier.

South Korea created another round of an extra budget of 16.9 trillion won in February to support small merchants stung by the pandemic and virus curbs.

With the extra budget, the national debt is forecast to reach 1,075.7 trillion won this year and the debt-to-GDP ratio is expected to rise to a record high of 50.1 percent, according to the government's estimate.

The fiscal deficit is expected to reach 70.8 trillion won this year, equivalent to 3.3 percent of the GDP. (Yonhap)