'Major Shareholder Capital Gains Tax Controversy' Presidential Office: "Difficult to Reconsider Policy Based on Short-Term Stock Fluctuations"

The Office of the President stated that it has never requested the ruling party leadership to reconsider the major shareholder criteria for the stock capital gains tax. This is interpreted to mean that while various public opinions are being collected, a formal request for reconsideration has not been made.

Yonhap News Agency

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On August 5, spokesperson Kang Yoo-jung said during a briefing, "It is difficult to reconsider policy based solely on one or two days of stock price fluctuations when it comes to changing the structure of the stock market," and firmly added, "We have not requested a review of the capital gains tax criteria."

She continued, "The Lee Jae-myung administration is steadily pursuing measures to make the Korean stock market structurally healthier," and asked, "Please understand this as a basic stance that the ruling party's opinions can be collected."

On this day, some media outlets reported that the Office of the President had asked the Democratic Party leadership to deliver the ruling party's opinions regarding a tax reform plan that would expand the scope of those subject to the capital gains tax. In response, some interpreted this as a move with reconsideration in mind, especially as investor backlash continued.

Previously, the government included in the tax reform plan a measure to lower the major shareholder threshold from the current 5 billion won to 1 billion won. Immediately after the announcement of the reform plan, the index plunged, leading to criticism that it was accelerating the decline in stock prices. As public opinion deteriorated, there were also remarks within the party suggesting reconsideration. Kim Byung-ki, floor leader of the Democratic Party, said, "We will look into the possibility of raising the 1 billion won major shareholder threshold, focusing on the KOSPI5000 Special Committee and the Tax Normalization Special Committee."

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