Vice Minister Ki Jae: "Securities Transaction Tax Should Be Maintained... Functions to Suppress Market Instability Factors"

May Industrial Activity Trends: Export and Manufacturing Sector Weakness Persist

[Asia Economy Reporter Jang Sehee] Kim Yong-beom, First Vice Minister of the Ministry of Economy and Finance, stated on the 30th regarding the abolition of the securities transaction tax advocated by the political circles, "The securities transaction tax needs to be maintained not only from a fiscal perspective but also from a functional perspective."

Vice Minister Kim presided over the macroeconomic and financial meeting at the Seoul Banking Hall on the same day and said, "The securities transaction tax functions to suppress market instability factors such as high-frequency trading and maintains taxation on foreigners' domestic stock trading."

He emphasized, "Most small investors are expected to see a reduction in tax burden, and with the allowance of loss offsetting and carryforward deductions, investment in various financial investment products is expected to be activated."

From 2023, capital gains taxation on listed stocks, which was previously limited to major shareholders, will be expanded to small shareholders. After deducting a basic exemption of 20 million KRW, a tax rate of 20% applies to gains up to 300 million KRW, and 25% applies to gains exceeding 300 million KRW. Meanwhile, the securities transaction tax rate will be lowered from the current 0.25% to 0.23% in 2022 and further to 0.15% in 2023.

Vice Minister Kim stressed the need to monitor the flow of liquidity supply released in response to the novel coronavirus disease (COVID-19).

He said, "Although liquidity expanded during the COVID-19 response, it has not sufficiently flowed into productive sectors such as corporate investment, and some still complain of liquidity shortages," adding, "We will accelerate market liquidity to overcome the crisis early and promote productive investment."

He also mentioned plans to create many profitable and attractive investment destinations. He said, "We will promptly implement the three major projects of the second half economic policy direction, including the Korean New Deal, fostering new industries such as quarantine, bio, system semiconductors, and future cars, and supporting reshoring to induce expansion of productive private investment." He further explained, "We will also devise measures to revitalize startup and venture investments, such as allowing limited ownership of corporate venture capital (CVC) by general holding companies."

Regarding the 'May Industrial Activity Trends' announced that day, he evaluated, "Exports and manufacturing continued to show sluggish trends," but added, "As economic activities in major countries gradually normalize, our exports in June are showing signs of somewhat escaping the severe slump experienced in April and May."

Meanwhile, due to the impact of global demand contraction and other factors, exports in May decreased by more than 20% for the second consecutive month following April, and mining and manufacturing production also sharply declined by over 6% for two consecutive months.

This content was produced with the assistance of AI translation services.