Capital gains tax on stock investors emerges as key voting issue

• Published date: 07 February 2022
• Publication title: The Korea Times

By Lee Kyung-min The government's plan to impose at least 20 percent tax on gains of at least 50 million won ($41,680) from stock trading starting in 2023 is emerging as a key election issue, in the latest of an economic policy becoming politicized due to public sentiment swinging widely.Whether the plan will undergo a politically motivated revision remains to be seen, as illustrated in the previous failure of a similar taxation effort by the finance ministry to tighten rules over the definition of "large shareholders" to holders of stocks of over 300 million won, down from 1 billion won.

Main opposition presidential contender Yoon Suk-yeol said during a nationally televised debate, Feb. 3, that the plan should be abolished, in a major change of stance from his presidential pledge announced Dec.

27, when he said the plan should proceed as scheduled, whereas only the stock trading tax should be abolished.Ruling party presidential candidate Lee Jae-myung criticized his conservative counterpart for flip-flopping, stressing the plan is needed to hold "the rich" to account for hefty capital gains in the financial market, where small retail investors almost always lose against the larger overseas and institutional investors.

Currently, a capital gains tax is imposed on gains from stock trading of non-listed firms. It is also imposed for holders of 1 billion won or more worth of a single stock item, 1 percent or more of stocks listed on the benchmark KOSPI or 2 percent or more of stocks listed on the tech-heavy Kosdaq.

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