Party and Government Discuss Major Shareholder Threshold for Stock Capital Gains Tax... "Will Monitor Developments Further"

The government and the ruling party decided on August 10 to monitor future developments before reaching a conclusion regarding the major shareholder threshold for stock capital gains tax.

Park Suhyeon, chief spokesperson of the Democratic Party of Korea, held a briefing at the National Assembly after a high-level party-government meeting on the same day. He stated, "There was a discussion regarding the stock capital gains tax at today's meeting. The party and the government have engaged in close discussions and coordination, and have decided to observe the situation further before making a decision."

Yonhap News

Previously, at the end of last month, the Ministry of Economy and Finance proposed a tax reform plan to strengthen the major shareholder threshold for capital gains tax on listed stocks from the current 5 billion won to 1 billion won. This sparked both support and opposition within the ruling party. Those in favor view the measure as a process of reversing the tax cuts for the wealthy implemented by the Yoon Suk Yeol administration. However, those opposed have criticized the move, arguing that it does not align with the Lee Jaemyung administration's policy of revitalizing the stock market.

It was reported that the Democratic Party's Policy Committee conveyed its opinion on the major shareholder threshold for the capital gains tax during the meeting with the government. Within the party, there is reportedly stronger support for maintaining the threshold at 5 billion won.

The party and the government also reviewed follow-up measures related to the recent Korea-U.S. tariff negotiations and discussed future plans. Park, the chief spokesperson, said, "The party and the government plan to provide support to alleviate export difficulties for tariff-vulnerable industries and small and medium-sized parts manufacturers, conduct impact analyses by major industry, and prepare support measures. These policy and budgetary supports will be pursued in parallel to mitigate domestic tariff damages."

Park further stated, "The party requested that the government proceed with consultations with the U.S. side on the timing of automobile tariff reductions in accordance with the Korea-U.S. trade agreement, and to closely pursue follow-up measures such as the creation and utilization of a financial package for Korean companies to expand opportunities in the U.S. market."

The issue of the Asia-Pacific Economic Cooperation (APEC) summit, scheduled for late October, was also discussed. Park said, "The party requested the government to thoroughly prepare for the summit by ensuring timely infrastructure development and robust program planning. The government expressed its commitment to complete preparations, including infrastructure, by late September without any setbacks."

In addition, the government decided to actively review support measures in response to a request from Democratic Party leader Jung Cheongrae to prepare countermeasures for flood victims.