Chief finance candidate calls for delaying taxation of stock gains and virtual assets


Korea’s finance minister candidate Choo Kyung-ho on Monday spoke of the need to delay the planned taxation of capital gains from financial investments and cryptocurrencies by two years until 2025. .

From next year, the government plans to levy the 20% capital gains tax rate on financial investments, including stocks, bonds and funds. For equity investments, investors must pay capital gains tax on profits that exceed 50 million won ($39,500).

“There is a need to induce more funds to flow into the stock market by removing a capital gains tax on financial investments and lowering a tax on stock trading,” Choo told a hearing. parliamentary confirmation.

During the election campaign, President-elect Yoon Suk-yeol said he would abolish capital gains tax on equity investments in a bid to support retail investors, while maintaining the tax on stock market transactions at certain levels.

Last year, Korea lowered the stock market transaction tax rate on listed shares to 0.23% from 0.25%. The government plans to further reduce the rate to 0.15% from 2023, when it will start levying capital gains tax on financial investments.

Choo also said that a planned taxation on cryptocurrencies should also be postponed for two years until 2025.

The country was supposed to levy a 20% tax on capital gains from viral asset transactions that exceed 2.5 million won starting this year.

But rival political parties had agreed to delay its implementation by a year until next year, citing the lack of a tax system and measures to protect investors.

Investors in bitcoin and other cryptocurrencies have cried foul of the government’s tax plan, saying authorities should apply the same tax standards imposed on stock market transactions.

On inflation, Choo said the country’s consumer prices could top March’s growth rate of 4.1% for the time being as inflation comes under upward pressure amid rising energy costs.

“Inflation is expected to remain volatile for now in a way that could worsen further above the 4.1% growth rate in March,” he added.

Consumer prices in Korea rose more than 4% for the first time in more than a decade in March as the war between Russia and Ukraine pushed up prices for energy and other materials raw. In February, inflation increased by 3.7% year-on-year.

The International Monetary Fund recently lowered its growth outlook for the Korean economy for 2022 to 2.5% while raising its inflation projection to 4%. The Bank of Korea aims to keep annual inflation at 2% over the medium term.

Choo said the Korean economy is in a “serious” situation where weak economic growth could be entrenched while inflation is high.

“The country could be trapped in low growth. Korea’s potential economic growth rate has continued to decline as government-led growth has undermined the vitality of the private sector,” he added. .

Yonhap

Yonhap

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