On the morning of the 28th, the stock prices of financial stocks are all falling. As criticism of a "tax cut for the ultra-wealthy" continues within the ruling party regarding the separate taxation of dividend income, it is interpreted that investor sentiment towards the financial sector, which includes high-dividend stocks, has weakened.
As of 11:19 a.m. on the 28th, Hana Financial Group is trading at 84,100 won, down 8,400 won (9.08%) from the previous trading day.
At the same time, KB Financial (-6.4%), Shinhan Financial Group (-5.97%), and Woori Financial Group (-3.91%) are also seeing their stock prices decline.
Following the securities industry, Mirae Asset Securities (-4.63%) and Korea Investment Holdings (-4.76%), insurance companies such as Samsung Fire & Marine Insurance (-4.39%) and Samsung Life Insurance (-3.27%) are also experiencing weakness in stock prices.
As criticism of a "tax cut for the ultra-wealthy" regarding the separate taxation of dividend income emerged, it appears there was a release of disappointment sell-offs. The bank, securities, and insurance sectors all saw significant stock price increases due to expectations for separate taxation policies.
Jin Sung-jun, chair of the Democratic Party of Korea's Policy Committee, stated on the 25th in a statement, "One out of 100 stock investors takes 70% of total dividend income," adding, "Reform of the dividend income tax system must be approached with caution."
Currently, if dividend or interest income is below 20 million won, it is taxed at a low rate of 14%, and if it exceeds 20 million won, the highest tax rate of 45% is applied.
☞ Separate taxation of dividend income
It is the practice of taxing the dividend income of investors in listed companies separately from employment and interest income at a lower tax rate. As the amount increases, it avoids the progressive tax rate (6-45%) where the tax burden increases, thereby reducing the tax load.