[Expert Roundtable] "Securities Taxation Roadmap Missing" - Urgent Issue Is Separate Taxation of Dividend Income

Five Capital Market and Taxation Experts Identify Key Tasks for Modernizing the Financial Investment Tax System
"Presidential Task Force on Taxation Modernization Must Be Launched"

"There is no mid- to long-term taxation roadmap." "The securities transaction tax should be abolished, and capital gains tax on stocks should be introduced based on income."

Five experts in capital markets and taxation, who attended the Asia Economy newspaper's roundtable on securities taxation, agreed in principle with the Lee Jaemyung administration's policy of "revitalizing the capital market." However, they emphasized that stocks and virtual assets cannot remain tax-free forever, and unanimously called for the launch of a presidential task force on advanced taxation.

A roundtable discussion on stock market taxation held at the Asia Economy headquarters. From the left, Jun Sik Seo, Professor of Economics at Soongsil University; Moon Sung Oh, Professor of Tax Accounting at Hanyang Women's University; Gap Rae Kim, Director of the Financial Law Research Center at the Capital Market Research Institute; Woo Cheol Kim, Professor of Taxation at the University of Seoul; Ho Rim Yoo, Professor of Taxation at Kangnam University. Photo by Young Han Heo

At the roundtable held on September 17 at Euljiro Asia Media Tower for about two hours, more than half of the participants identified "separate taxation of dividend income" as the most urgent area for improvement in the financial investment tax system. Four participants strongly supported separate taxation, citing its role as a "gateway connecting capital markets and economic revitalization" and its potential to resolve the issue of double taxation. However, one participant opposed, pointing out that the dividend income recirculation tax introduced during the Park Geunhye administration had already proven ineffective. Jun Sik Seo, Professor of Economics at Soongsil University, said, "This is an important issue related to our country's economic power and national strength. The tax rate should be lower than the capital gains tax to incentivize dividends," proposing a top rate of 20-25%, which is below the 25% maximum rate suggested by Democratic Party lawmaker Lee Soyoung.

The experts also stressed that, in the mid- to long-term, tax reform should focus on the already abolished Financial Investment Income Tax. Many also called for the abolition of the transaction tax. Regarding the taxation of virtual assets, which has already been postponed three times, participants warned that another delay due to system deficiencies would result in a complete loss of momentum for implementation.

Moon Sung Oh, Professor of Tax Accounting at Hanyang Women's University, stated, "No one would oppose the principle of taxing capital gains, since there is income involved," and suggested "a system where losses, if proven, are refunded." Gap Rae Kim, Director of the Financial Law Research Center at the Capital Market Research Institute, who was the first to propose the presidential task force on advanced taxation, pointed out, "With regard to virtual assets, Korea is experiencing an unprecedented third postponement among OECD countries," and warned, "If this administration fails to resolve the issue, it will continue to be dragged out."

Some participants also expressed concern over the government's "KOSPI 5000" slogan, warning against blatant populism both inside and outside political circles. Woo Cheol Kim, Professor of Taxation at the University of Seoul, said, "Unreasonable taxation should be eliminated because it has an unreasonable impact on the stock market," but also cautioned, "We should not fall into the mechanical thinking that giving up tax revenue will automatically benefit the stock market." Ho Rim Yoo, Professor of Taxation at Kangnam University, emphasized, "We should not focus solely on the capital market, but discuss all assets together. Policies should be designed to induce money movement," calling for a mid- to long-term taxation roadmap that includes real estate tax reform.

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