Presidential office urges parliament to review abolition of financial investment income tax

Aug 08, 2024, 10:12 am

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The main benchmark Korea Composite Stock Price Index is shown in a dealing room at Hana Bank in Seoul on Aug. 7, 2024./ Source: Yonhap News

AsiaToday reporter Hong Sun-mi

The presidential office urged the National Assembly on Wednesday to positively review the government’s proposal to abolish the financial investment income tax.

The government and the ruling party have decided to scrap the financial investment income tax, which is scheduled to be implemented next year, and are seeking to revise the law, stating that the move is aimed at protecting retail investors and prevent a slump in the domestic stock market.

On top of that, the government and the ruling party believe that the need to abolish the financial investment income tax increased as the domestic stock market has fluctuated significantly recently due to concerns over a U.S. economic slowdown.

However, as the ruling and opposition parties failed to narrow their differences over the abolition of the tax, the presidential office directly sought cooperation from the opposition bloc.

It is seen that the presidential office’s call for the parliament to discuss the abolition of the financial investment income tax while President Yoon Suk-yeol is on vacation is a strong will of the president that the related discussion should not be delayed further.

“Under the circumstances that most people agree on scrapping the financial investment income tax, persisting uncertainties over its implementation is not appropriate,” the office said.

The office said the financial investment income tax could disadvantage retail investors at a time when a local stock market is greatly affected by rising volatility in the global financial market due to concerns over a U.S. economic slowdown and geopolitical risks. “If the financial investment income tax is implemented in the current environment, 14 million individual investors, most of them being middle-class, will suffer damage,” it said.

The financial investment income tax is a scheme to levy at least 20 percent tax on annual financial investment gains exceeding 50 million won (US$36,308) beginning next year.

Earlier in January, President Yoon said that his government will push for the abolition of the financial investment income tax for the long-term win-win of the people, investors, and the South Korean stock market, beyond the old-fashioned controversy over tax cuts for the rich.

#financial investment income tax #presidential office