Seo Yuseok, Chairman of the Korea Financial Investment Association: "Time to Review Dividend Income Tax Issue"

Policy Meeting on Revitalizing the Capital Market
Attended by Lee Jaemyung, Democratic Party Presidential Primary Candidate

Seo Yuseok, Chairman of the Korea Financial Investment Association, stated on the 21st, "Even if listed companies want to make more dividend decisions, the current structure requires them to pay up to 49.5% in taxes through comprehensive taxation," suggesting, "We need to review the issue of dividend income tax."

At the policy meeting for revitalizing the capital market held at the Korea Financial Investment Association in Yeouido, Seoul, that morning, Chairman Seo explained, "In Korea, unlike in the United States or Japan, 90% of companies are run by owner-managers."

He added, "If dividend income tax is adjusted to reflect reality, CEOs who are both major shareholders and managers will be more likely to make dividend decisions," and "Since Korea has a large elderly population, we need a system that enables seniors to sustain their livelihoods through dividend income."

Chairman Seo also stressed the need for a control tower to address the Korea Discount (the undervaluation of the domestic stock market). He said, "Improving corporate governance, strengthening shareholder returns, and providing tax benefits are all interconnected, making it difficult for a single government ministry to push these measures independently." He further suggested, "Establishing a special committee or special body at the pan-government level, chaired by the president or directly overseen by the president, would be an effective solution."

The meeting was attended by Lee Jae Myung, the Democratic Party presidential primary candidate, as well as heads of research centers from major domestic and international securities firms. Ko Taebong, head of IM Securities' research center, also emphasized the importance of resolving the Korea Discount.

Ko pointed out, "The outflow of overseas investment funds and the expansion of alternative assets have reduced the water pressure in the capital market," and "delays in amending the Commercial Act and issues with corporate governance are like holes in the pipeline." He stressed, "It is important to eliminate leaks through improvements in opaque governance structures, prohibitions on the pursuit of private interests, investor protection, and accounting transparency," adding, "Value-up is not a short-term task but a national project that must be pursued with a long-term strategy."

Kim Dongwon, head of KB Securities' research center, proposed, "The government needs to make strategic investments to strengthen the competitiveness of the artificial intelligence (AI) industry." He added, "Building AI data centers requires trillions of won, and since it is difficult for large corporations to bear this alone, the government should take responsibility for the infrastructure by designating it as a national strategic industry."

Kim also highlighted the need to improve the current outside director system. He said, "The current regulation excluding those from the same industry reduces corporate expertise," and "relaxing appointment standards is necessary to gain the trust of foreign investors."

Lee Jae Myung, the Democratic Party presidential primary candidate, attended the "Policy Meeting for Revitalizing the Capital Market" held at the Korea Financial Investment Association in Yeouido, Seoul, on the 21st, and delivered opening remarks. At this event, Lee met with heads of securities firms' research centers to receive briefings on the current status and evaluation of the Korean stock market and exchanged opinions on ways to advance the market. 2025.04.21 Photo by Yoon Dongjoo

After receiving suggestions from capital market experts on revitalizing the capital market, candidate Lee stated, "If it is confirmed that revising the dividend income tax increases dividend income without negatively impacting national tax revenue, it is something that should naturally be implemented." However, he also expressed caution, saying, "We need to precisely analyze whether only a select few would benefit and whether this would lead to a decrease in tax revenue."

Lee argued, "If we can properly eliminate abnormal elements in our capital market, the KOSPI could surpass 3,000," and added, "With just a few additional measures, I believe it could easily exceed 5,000 in the long run."

He explained, "Because the capital market is operating abnormally, people have no place to invest their assets, so instead of investing in stocks, everyone is investing in real estate."

Attendees at the meeting included the heads of research from major securities firms such as Ko Taebong of IM Securities, Kim Dongwon of KB Securities, Kim Youngil of Daishin Securities, Kim Hakgyun of Shinyoung Securities, Kim Hyeeun of Morgan Stanley Securities, Noh Geunchang of Hyundai Motor Securities, Park Younghoon of Hanwha Investment & Securities, Park Heechan of Mirae Asset Securities, Yoo Jonggu of Korea Investment & Securities, Yoon Seokmo of Samsung Securities, Yoon Yeocheol of Yuanta Securities, Yoon Changyong of Shinhan Investment & Securities, Lee Seunghoon of IBK Investment & Securities, Cho Suhong of NH Investment & Securities, Choi Kwanghyuk of LS Securities, and Choi Doyeon of SK Securities. Chairman Seo Yuseok of the Korea Financial Investment Association and Choi Youngkwon, President of the Korea Analyst Association, were also present.