Yoon vows bold reforms in stock market taxes

President Yoon Suk Yeol vowed Wednesday to implement “bold” reforms in stock market taxes to correct the perceived undervaluation of South Korean shares and improve the financial situation of ordinary people.

Yoon made the remark during a meeting with some 50 financial service users, including full-time investors, office workers and small business owners, the fourth in a series of policy debates involving the government and members of the public. The session doubled as the Financial Services Commission’s policy report to the president.

“Excessive tax systems that hinder the development of stock markets ultimately harm the middle class and ordinary people,” he said during the discussion held at the Seoul office building of the Korea Exchange, the country’s bourse operator. “If it is something that can be done through a presidential decree, I will boldly push for it even if it is politically disadvantageous.”

Yoon said reforming such “excessive” tax systems will help fundamentally resolve the “Korea discount,” a term referring to the perceived undervaluation of South Korean stocks.

He also stressed the role of stock markets in increasing the wealth of individuals.

“The financial investment sector eases class conflict between capitalists and laborers, and between companies and workers, and makes the people one,” he said.

Yoon vowed to give minority shareholders a greater voice by pushing for legislative revisions to institutionalize virtual general shareholders’ meetings.

He also said the government will expand eligibility for individual savings accounts (ISAs) and raise the limit on the non-taxable amount.

“We will sharply expand eligibility for ISAs and increase the limit on the non-taxable amount,” he said. “In order for the state and society to prevent the solidification of classes and increase society’s dynamism, the financial investment sector must be vitalized.”

ISAs were introduced in South Korea in 2016 as part of the government’s efforts to help individuals increase their wealth with a one-stop scheme and give customers tax benefits.

They allow customers to pick specific investment products themselves or leave financial services firms responsible for managing assets.