Tax exemptions and incentives are expected to rise almost 3 trillion won ($2.6 billion) on-year this year as the country seeks to help vulnerable people cope with the fallout of the pandemic.

The value of the country's subsidies offered via tax exemptions and credit is estimated at 56.8 trillion won this year, up from last year's 53.9 trillion won, according to the Ministry of Economy and Finance.

The percentage of tax subsidies against total tax revenue is likely to reach 15.9 percent this year, up from 15.4 percent the previous year.

The country has increased tax exemptions or credit programs to smaller merchants and vulnerable groups to help them cope with the economic fallout from the COVID-19 pandemic.

Last year, the country saw tax revenue decline 7.9 trillion won as the collection of corporate taxes fell amid the new coronavirus outbreak.

The ministry said it will provide tax subsidies to the needy to help revitalize the economy, but also make efforts to reduce unnecessary tax incentives. (Yonhap)