Heated Debate on Financial Investment Tax Within the Democratic Party... Opposition's Forum After the Holiday in Focus

Policy Debate at the National Assembly on the 24th
Differences in Implementation, Postponement, and Abolition

After the Chuseok holiday, the Democratic Party of Korea's policy forum on the financial investment income tax is drawing attention not only from the political sphere but also from the securities industry and general investors. This is because the powerful opposition party holding legislative power in the 22nd National Assembly will effectively decide whether to postpone the enforcement of the law.

Photo by Asia Economy DB

According to political circles on the 15th, the Democratic Party is recruiting discussants to hold a forum on the 24th. At this forum, the party plans to exchange various opinions on the enforcement, postponement, or abolition of the financial investment income tax.

It is uncertain whether the Democratic Party will reach a conclusion on the financial investment income tax at the forum immediately. Opinions within the party are currently largely divided between postponement and implementation after supplementation.

Originally, the Democratic Party held the position that the financial investment income tax should be implemented as scheduled, but as demands for abolition grew mainly among general investors, calls to postpone the enforcement have surfaced since last month.

As of this day, those who have expressed their intention to attend the forum include lawmakers Kim Young-hwan, Kim Hyun-jung, Park Seon-won, Lee Kang-il, and Lee Yeon-hee (in alphabetical order). Lawmakers Park Seon-won, Kim Hyun-jung, and Lee Yeon-hee have expressed opinions in favor of postponement, while the others are reported to lean toward "supplement and implement."

For now, the number of lawmakers within the Democratic Party stating that "the financial investment income tax enforcement should be postponed" is increasing.

On the 9th, Supreme Council member Lee Eon-ju stated at the Supreme Council meeting, "It is not too late to implement the financial investment income tax after advancing the stock market," and argued, "If the tax is enforced recklessly, the psychological burden of investment loss concerns will increase for the 14 million citizens participating in the stock market." This statement attracted attention as it was the first postponement argument from the party leadership.

However, there are also considerable voices within the party advocating for implementing the financial investment income tax as is but with system improvements. Jin Sung-jun, chairman of the party’s policy committee, who oversees party policies, maintained his stance on January enforcement of the tax in a Facebook post on the 11th, saying, "It is right to pay taxes if profits are made even on unpaved roads."

At the financial investment income tax policy seminar held by the lawmakers' group 'Tax and Finance Forum' just before the Chuseok holiday, the argument against postponement was reportedly dominant.

Meanwhile, there is also a sensed atmosphere cautioning against the expansion of debates surrounding the enforcement of the financial investment income tax.

A first-term lawmaker said, "There are concerns about this issue being given significant attention within our party while the government and ruling party are making the abolition of the financial investment income tax an issue," adding, "Although time is not abundant, many opinions suggest that a hasty conclusion should be avoided."