Kim Dong-yeon on the 24th Financial Investment Tax Forum: "Let's Handle Financial Investment Tax and Capital Market Advancement in One Shot"

Kim Dong-yeon, Governor of Gyeonggi Province

Gyeonggi Province Governor Kim Dong-yeon once again proposed resolving the ‘financial investment income tax’ and the advancement of the domestic capital market in one shot.

On the 24th, Governor Kim posted on his social media (SNS) a message titled ‘Let’s resolve the financial investment income tax and capital market advancement in one shot,’ saying, "I feel frustrated watching the recent financial investment income tax debate," and added, "I am worried it seems to be turning into a political power struggle."

He continued, "Neither forcibly enforcing nor abolishing the financial investment income tax is the answer," and pointed out, "If it is enforced as is, contraction of the capital market is inevitable. Abolishing it would be an irresponsible act that undermines tax principles and market trust."

In particular, he said, "Proposing another postponement after already having two is just passing the buck and a temporary fix," and added, "The financial investment income tax must go ‘together’ with the advancement of the capital market."

He then argued, "First, we must reform the outdated corporate governance system and overhaul the institutions and practices where controlling shareholders infringe on the interests of ordinary shareholders," and stated, "We need to introduce directors’ fiduciary duties to shareholders and improve the market valuation system to use fair value or net asset value during corporate splits or mergers."

He also emphasized, "Treasury stock must be mandatorily canceled after repurchase to prevent its misuse as a means of defending management rights."

Furthermore, he advised, "The current financial investment income tax law must be drastically revised," suggesting, "We should induce a smooth landing of the system by raising deduction limits and extending the period for offsetting gains and losses to mitigate market shocks."

He specifically stated, "To encourage long-term investment, non-taxation or lower taxation should be applied to long-term investors excluding the wealthy, and administratively convenient systems such as semiannual withholding tax and health insurance premium imposition should be abolished."

Governor Kim also pointed out, "At the same time as implementing the financial investment income tax, securities transaction tax should be gradually eased and abolished," explaining, "Maintaining a transaction tax that is collected even when there is a loss while introducing the financial investment income tax is double taxation, and considering that retail investors bear 75% of the transaction tax, it is also unfair in terms of tax equity."

Finally, he proposed, "With such high interest in the financial investment income tax now, and with various issues and institutional improvement tasks all on the table, this is a good opportunity to fix the flawed capital market," adding, "If the ruling and opposition parties and the authorities put their heads together without dragging it into political debate, it is possible to handle it within this regular National Assembly session. Let’s start right now."

Meanwhile, the Democratic Party of Korea will hold a policy debate titled ‘Happy and Just Korea, How to Implement the Financial Investment Income Tax?’ on the morning of the 24th at the National Assembly in Yeouido, Seoul.

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