South Korea may collect around 32 trillion won ($28.6 billion) in excess tax revenue this year, potentially securing ammunition to finance another round of an extra budget under review, government sources said Sunday.

Finance Minister Hong Nam-ki said Friday the government is considering creating this year's second extra budget with a larger-than-expected tax revenue in a bid to underpin an economic recovery and support vulnerable groups hit hard by the pandemic.

The country is estimated to collect 315 trillion won in tax revenue this year, up 32 trillion won from its earlier forecast of 283 trillion won, according to government and parliamentary sources.

In the first quarter, the country collected 88.5 trillion won in tax revenue, up 19 trillion won from a year.

The larger tax revenue is anticipated as capital gains tax income will likely increase amid a boom in the housing and stock markets. Corporate tax income is also expected to rise as firms have logged robust earnings amid an economic recovery.

Talks of another extra budget has gained traction since President Moon Jae-in recently said the country needs to leave the door open for additional fiscal support.

Based on the estimated excess tax revenue, the government and the ruling Democratic Party (DP) are reviewing the supplementary budget whose size may amount to between 20 trillion won and 32 trillion won.

South Korea created an extra budget of 14.9 trillion won in March to finance the 20.7 trillion-won relief aid for smaller merchants and vulnerable people hit hard by the pandemic.

Last year, the country drew up four rounds of extra budgets totaling 67 trillion won to tackle the economic fallout of the COVID-19 pandemic.

The DP floated the idea of providing another massive stimulus check to all households as early as the upcoming summer vacation season. But the finance ministry has opposed the universal payment of relief funds, citing the growing national debt.

The government offered 14.3 trillion won in one-off emergency cash handouts to all households in May last year, including up to 1 million won to four-member households. It has so far provided three rounds of targeted support to smaller merchants and vulnerable groups.

With the latest supplementary budget, the country's government debt is expected to reach 965.9 trillion won this year. The debt-to-GDP ratio will likely hit 48.2 percent.

Last year, the country's national debt grew by the largest-ever amount of 123.7 trillion won to a record high of 846.9 trillion won. (Yonhap)