Goyongjin Proposes Complete Abolition of Securities Transaction Tax Act: "0.1% Next Year, Full Abolition by 2025"

Accelerating Abolition Against Government Policy to Roll Back Securities Transaction Tax Cut

Goh Yong-jin, Member of the Democratic Party of Korea Photo by Yonhap News

[Asia Economy Reporter Naju-seok] In opposition to the Yoon Seok-yeol administration's retreat on reducing securities transaction tax, the Democratic Party has proposed the Securities Transaction Tax Act, which centers on abolishing the securities transaction tax by 2025.

On the 20th, Democratic Party lawmaker Ko Yong-jin proposed the Securities Transaction Tax Act, which lowers the current 0.23% (including agricultural and special tax) securities transaction tax to 0.1% next year, 0.05% in 2024, and completely abolishes it in 2025.

Previously, in 2020, the ruling and opposition parties amended the law to reduce the securities transaction tax rate to 0.15% starting next year. However, the current government plans to lower the securities transaction tax to 0.2% next year, which is higher than the bipartisan agreement. In response, Lawmaker Ko intends to accelerate the reduction beyond the original bipartisan agreement to achieve a larger cut in the securities transaction tax.

On the other hand, regarding capital gains tax on listed stocks, the government proposed lowering the major shareholder threshold from the current 1 billion KRW per stock to 10 billion KRW. Lawmaker Ko criticized, "The expansion of the taxable scope for listed stocks has been a consistently pursued policy regardless of party since 2012. Originally, it was imposed only on high-net-worth individuals holding more than 10 billion KRW per stock, but under the Lee Myung-bak administration it was lowered to 5 billion KRW, under the Park Geun-hye administration to 2.5 billion KRW, and under the Moon Jae-in administration to 1 billion KRW. Now, the Yoon Seok-yeol administration wants to revert it back to 10 billion KRW per stock."

Regarding this, Lawmaker Ko pointed out, "This means that the normalization of asset income taxation is regressing to 10 years ago." He estimated, "There are about ten thousand 'major shareholders' holding more than 10 billion KRW per stock. This number is less than 0.1% of the 13.84 million individual investors," and diagnosed, "If the major shareholder threshold is narrowed targeting stock-rich individuals, a massive decrease in tax revenue is inevitable."

Concerning this bill, Lawmaker Ko stated, "Expanding the scope of stock taxation while lowering transaction taxes has long been a bipartisan consensus," and added, "I cannot agree with abandoning the 2020 bipartisan agreement as if turning over a hand and pushing for tax cuts for the wealthy." He also emphasized, "To revitalize the stock market and protect individual investors, it is appropriate to lower the securities transaction tax rather than narrowing the scope of major shareholder capital gains tax."

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