"Past Increases in Tax Requirements Had Little Impact on Stock Prices"
Jinseongjun, the Policy Committee Chair of the Democratic Party of Korea, is leaving after a closed party-government meeting on the tax reform plan held at the National Assembly Members' Office Building on July 29, 2025. Photo by Kim Hyunmin
Debate continues within the ruling party over the government's tax reform plan to lower the threshold for major shareholders subject to capital gains tax on stocks from the current 5 billion won to 1 billion won.
On the 2nd, Jin Sungjoon, Policy Committee Chair of the Democratic Party of Korea, effectively expressed opposition to Floor Leader Kim Byungki’s suggestion the previous day that the party may consider raising the major shareholder threshold and thus reconsidering the government’s announcement.
Jin explained, "Some argue that strengthening capital gains tax requirements for stocks would collapse the stock market, but historical precedent shows otherwise. During the Park Geunhye administration, the threshold was gradually lowered from 10 billion won to 2.5 billion won, and under the Moon Jaein administration, it was reduced from 2.5 billion won to 1 billion won, but there was little change in stock prices."
He added, "The Yoon Sukyeol administration relaxed the threshold to 5 billion won, but stock prices actually fell. Restoring the tax requirements is a measure to rebuild the damaged tax revenue base."
He also stated, "The government must pursue national tasks in a balanced way to secure fiscal resources. Since the tax reform plan was prepared through party-government consultations, we will also work closely together during the National Assembly review process."
Previously, Floor Leader Kim had stated a day after the government’s tax reform announcement that "the possibility of raising the major shareholder threshold will be considered, focusing on the KOSPI5000 Special Committee and the Tax Normalization Special Committee." This statement came as the domestic stock market recorded its largest drop in four months the previous day.
Regarding this, Jin told reporters at Kintex in Goyang City, Gyeonggi Province, where the party convention was held, "The reform plan has not yet been finalized. We must make a judgment while observing market conditions, but I do not believe Floor Leader Kim’s comments have shaken the party’s position."
On July 31, the government announced the "2025 Tax Reform Plan," which includes lowering the major shareholder tax threshold from 5 billion won to 1 billion won.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
