Choi Sang-mok "Concerns Over Capital Market's Net Function Shrinkage if Financial Investment Tax Implemented"

Government Questioning on Economic Issues on the 11th

Choi Sang-mok, Deputy Prime Minister for Economy and Minister of Strategy and Finance, expressed concerns that the financial investment income tax (Geumtu Tax) might significantly dampen the positive functions of the capital market.

On the 11th, during a parliamentary question session on economic matters, Deputy Prime Minister Choi stated, "The domestic stock market plays a role in channeling household funds to our companies," adding, "Many university students are interested in the stock market, but they all unanimously say that if a tax like the Geumtu Tax is implemented, they would 'go overseas or withdraw their domestic investments.'

Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok is responding to a question from Lee Eon-ju, a member of the Democratic Party of Korea, during the government-related economic sector questioning session held at the National Assembly on the 11th. Photo by Kim Hyun-min kimhyun81@

Deputy Prime Minister Choi further emphasized that if the Geumtu Tax is implemented, capital might flow into other markets such as real estate. He said, "Those with more money might expand their investments in the real estate market or other assets," and added, "Ultimately, money might flow into asset markets other than the domestic stock market."

Choi explained, "Since the tax targets a minority, the side effects are not only on them but also have an overall negative impact on the 14 million investors in the financial market," and noted, "Some even say there could be negative effects similar to a bank run (mass cash withdrawal) in the banking sector."

Regarding securities transaction tax, he said, "If the Geumtu Tax is abolished, the market's source of anxiety will disappear, so it is necessary to review the entire stock market taxation from a zero base." The securities transaction tax is levied regardless of gains or losses from securities trading, whereas the Geumtu Tax is imposed when income arises from financial investment activities.