With the KOSPI index breaking above 5,000 for the first time, People's Solidarity for Participatory Democracy (PSPD) on the 22nd said the government and the National Assembly should use this as a starting point to discuss a roadmap to normalize financial taxation, including reintroducing the financial investment income tax, restoring the large shareholder standard to normal, and reinstating the principle of taxing dividend income.
People's Solidarity for Participatory Democracy (PSPD) said the repeal of the financial investment income tax was a political choice made for reasons of "market conditions" and "circumstances," not because the system itself was flawed, and noted that the stock market has now moved beyond an activation phase and entered a stage where institutional normalization should be discussed.
The financial investment income tax is a system that imposes a tax in the 20% range if one earns 50 million won or more in revenue in a year from financial investments such as stocks, bonds and funds. It was scheduled to take effect in Jan. last year but was repealed after bipartisan agreement.
People's Solidarity for Participatory Democracy (PSPD) argued that the financial tax system has become more complex and unfair since the repeal of the financial investment income tax. People's Solidarity for Participatory Democracy (PSPD) said only tax cuts like separate taxation on dividends are being discussed and a comprehensive review of financial taxation as a whole has effectively disappeared, and added that because the Yoon Suk-yeol administration kept the large shareholder threshold for stock capital gains tax at 5 billion won, those who pay taxes on stock transfer gains are limited to ultra-high-net-worth individuals accounting for just 0.004% of all investors.
It went on to urge the government and the National Assembly to begin discussions on normalizing financial taxation to establish the principle of fair taxation and sustain the healthy growth of the stock market now that the KOSPI has broken 5,000, saying, "We should no longer use the Korea discount as an excuse."