SynopsisSouth Korea plans record budget spending exceeding 800 trillion won for fiscal 2027. This significant spending will be supported by stronger tax revenues from the AI chip industry. The government will prioritize investments in chips, AI data centers, and physical AI technologies. Existing spending programs will undergo major restructuring to secure necessary funding capacity. A new Future Response Fund will strategically invest excess tax revenue in key areas.South Korea said on Monday it would draw up record budget spending of more than 800 trillion won ($530.97 billion) for fiscal 2027, supported by stronger tax revenues from the booming AI chip industry.Budget Minister Park Hong-keun, speaking at a ‌national fiscal ⁠strategy ⁠meeting, said the spending plan would be financed through higher tax ​receipts and expenditure cuts. The proposed budget compares with this year's ​727.9 trillion won spending plan, excluding supplementary budgets.The government said three "mega-projects" - investments in chips, AI data centres and ​physical AI - would receive top fiscal ⁠priority, adding ‌that it would secure funding capacity ​through a ​major restructuring of existing spending programmes, rather ⁠than relying solely on increased tax revenue.President Lee ​Jae Myung said the government would use ​all available means to ensure that corporate investments proceed on schedule."Additional tax revenue coming at this time is a precious resource to be used at a golden time when global AI dominance will be determined," ‌Lee said.Budget Minister Park said the government would seek to restructure about 50 trillion won ​in spending, ​twice the level ⁠of the previous year, through a review of discretionary and mandatory expenditures and cuts to underperforming programmes.South Korea plans to launch a Future Response Fund as a strategic investment platform, setting aside tax revenue that exceeds long-term trends and investing it in four areas: youth, growth engines, regions and talent, the government said.($1 = 1,506.6900 won) ...moreElevate your knowledge and leadership skills at a cost cheaper than your daily tea.Subscribe Now