The office of South Korean President Yoon Suk Yeol has reportedly urged the National Assembly to abandon the current plan to impose a financial investment income tax on capital gains earned by individuals from listed securities on Wednesday, 7 August 2024.
The President’s office urged the National Assembly to abandon the plan to implement the “financial investment income tax” scheme, set to take effect in January 2025, due to the recent increase in domestic capital market volatility.
Describing the upcoming tax plan as “a potential downside risk for the stock market,” Yoon’s office stated that the plan could “expose around 14 million retail investors, predominantly from middle-income households, to potential losses,” potentially weakening their investment appetite.
“We call on the National Assembly to adopt a forward-looking approach towards the government’s proposal to nullify the tax plan,” Yoon’s office stated.
The new tax scheme will impose a 20% tax (excluding local taxes) on retail investors with combined annual capital gains exceeding KRW 50 million (USD 36,270) from shares, bonds, funds, and derivatives. If their annual net gains exceed KRW 300 million, the tax rate will rise to 25%.
