Democratic Party leader Lee Jae-myung announced on Monday to endorse the government’s proposal to eliminate a tax system targeting profits from financial investments, attributing the move to the necessity of revitalizing the nation’s undervalued stock market.
South Korea’s KOSPI Index rose 1.57% in the morning session on Monday following the news.
Lee expressed solidarity with the government and the ruling People Power Party in their endeavor to abolish the financial investment income tax, emphasizing the “structural vulnerability” of South Korea’s stock market and its unique downward trajectory compared to other global markets.
While recognizing the importance of taxing gains from investments to enhance market transparency, Lee highlighted the plight of the country’s 15 million stock investors reliant on market stability.
The decision follows persistent urging from the People Power Party for the Democratic Party, which holds a parliamentary majority, to support the repeal of the tax, initially slated for implementation last year but postponed until 2025.
According to the tax framework, capital gains exceeding 50 million won ($36,485) from stock investments would be subject to a 20 percent tax, escalating to a 25 percent tax rate for profits surpassing 300 million won.
