Seoul: South Korea will launch the "Future Fund" to promote long-term economic growth, using what the government calls "windfall revenue" from increased tax collection driven by the recent artificial intelligence (AI) boom, the budget ministry said.

According to Emirates News Agency, the Ministry of Planning and Budget unveiled the plan in partnership with relevant government agencies, stating that the AI industry has sparked a major transition across various areas, from the economy to social systems, beyond just a technological revolution.

"Amid the global chip boom, domestic tax revenue is expected to rise sharply, driven by an increase in corporate tax revenue," the budget ministry said as quoted by Yonhap News Agency. "We need to use the fiscal capacity secured under the current circumstances as valuable ammunition to take the lead in the global competition for technological supremacy," it added.

Budget Minister Park Hong-geun emphasized the importance of proactive fiscal management during a press conference, stating that rather than spending these precious resources on one-off expenditures, they should be used to lay the groundwork for future growth. He noted the need to change the management of public finances in line with the evolving fiscal environment.

The government plans to set aside the sharply increasing tax revenue to establish the Future Fund, which will serve as a strategic investment platform to raise the country's potential growth rate and mitigate the effects of tax revenue volatility. The budget ministry introduced the concept of "windfall revenue," which refers to tax revenue exceeding its long-term trend due to structural economic changes or significant economic fluctuations.

The windfall revenue will be used to finance the Future Fund, while surplus revenue will be directed towards supplementary budgets, repaying government debt, or making contributions to the fund.