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Finance minister renews need to delay new financial tax law

Economy 16:02 November 21, 2022

By Kang Yoon-seung

SEOUL, Nov. 21 (Yonhap) -- Finance Minister Choo Kyung-ho on Monday reiterated his call to delay the implementation of a new investment tax policy that may hurt the local stock market already hit hard by global economic uncertainties.

"I hope opposition parties consider the challenging economic situations and join us in reviewing the delay of the implementation of the financial investment income tax for two years," Choo told reporters during an event in Seoul.

The remark came as the government has been seeking to delay the implementation of the new tax scheme, which centers on levying a tax of 20 percent on capital gains above 50 million won (US$36,800) from stock investment in 2023.

Earnings exceeding 300 million won are subject to a 25-percent tax.

While the National Assembly passed the revision in 2020 for implementation in 2023, the Yoon Suk-yeol administration, which took office in May, has been seeking a delay of two years, citing market conditions.

The main opposition Democratic Party recently suggested it will comply with the postponement should the government lower the securities transaction tax from the current 0.23 percent to 0.15 percent.

Choo said the government cannot accept the opposition's proposal and that it has already suggested lowering the tax to 0.2 percent.

"(The opposition party) always expressed concerns over the government's tax revision plan, citing a possible decrease in tax revenues. I am not sure if it is reasonable to propose an option that may lead (to a decrease) of more than 1 trillion won in tax revenue," Choo added.

Experts say the government's tax revenue is expected to decline 1.9 trillion won if the rate is lowered to 0.15 percent. When adjusted to 0.2 percent, the related tax revenue is expected to fall 800 billion won.

Finance Minister Choo Kyung-ho speaks during an event in Seoul on Nov. 21, 2022. (Yonhap)

Finance Minister Choo Kyung-ho speaks during an event in Seoul on Nov. 21, 2022. (Yonhap)


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