Governance Forum: "Implementation of Financial Investment Tax Should Not Kick Away the Only Financial Income Ladder"

Chairman Lee Nam-woo: "We must not lose big by being trapped in the justification of taxation"

The Korea Corporate Governance Forum stated on the 10th that the implementation of the financial investment income tax (hereinafter referred to as the financial investment tax) should be carefully reviewed to ensure it does not kick away the only remaining ladder of wealth for the general public.

Namwoo Lee, Chairman of the Korea Corporate Governance Forum, said, "The discussion on the financial investment tax, which began with seemingly indisputable reasons such as 'taxes should be levied where income exists' and 'why should stocks be an exception,' recently seems to have gained popular legitimacy as a tax on the top 1% wealthy," but emphasized, "That is not the case at all."

Chairman Lee mentioned that the estimated amount invested by those subject to the financial investment tax constitutes a significant portion of the Korean stock market. He pointed out, "The financial investment tax is highly likely to inflict a fatal blow on the already fragile Korean stock market," adding, "During the process of adjusting their investment portfolios, a substantial amount of money will flow out to overseas markets, and Korean stock prices will lose their upward momentum." He further explained, "We must not forget that the Korean stock market is effectively in full competition with other stock markets such as those in the United States and Japan," and "Although there is a time difference, services that allow buying, selling, and even currency exchange all at once with a single click on a mobile app have become widespread."

He also stated, "It is crucial to deeply consider that while the financial investment tax has uncertain practical effects on income distribution, it causes tremendous shocks to the asset market," and explained, "To impose taxes at the same level as other advanced markets like the United States, it is necessary first to establish advanced shareholder protection laws, including the board of directors' duties to shareholders, before anything else."

Chairman Lee urged the government and political circles to reconsider and change their stance on the implementation of the financial investment tax. He pointed out, "The full implementation of the financial investment tax is likely to be a case of losing more than gaining," and "It will not only further reduce the assets of ordinary investors but also worsen the asset soundness of the National Pension Service, which has invested over 150 trillion won in the Korean stock market." He added, "Given that the government and political circles know this better than anyone else, it is questionable whether they intend to kick away even the last remaining ladder of financial income for the majority of the people."

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