South Korea to impose new tax on gains from all financial investments from 2022

SEJONG – South Korea plans to start collecting a new consolidated earnings tax from all financial investments in 2022, Finance Minister Hong Nam-ki said Thursday.

In addition, the government plans to levy a capital gains tax on equity investment gains exceeding 20 million won ($ 16,632) from 2023, Hong said.

Currently, South Korea levies capital gains tax on major shareholders who hold more than one billion won in a single share.

The tax proposal aims to “revitalize financial investment by improving the rationalization of taxation,” Hong said, adding that a complex tax regime on financial products had undermined investment.

From 2022, the consolidated earnings of all financial investments will be subject to a single tax rate, Hong said.

The government will gradually reduce the tax on stock transactions to 0.15% in 2023, from 0.25% currently, Hong said.

The tax bill is submitted to the National Assembly for approval.

The International Monetary Fund (IMF) on Wednesday downgraded South Korea’s GDP forecast for this year to a contraction of 2.1%, from its April outlook of a contraction of 1, 2%.

The IMF’s outlook also painted a darker picture of the global economy, as the coronavirus pandemic showed no signs of abating.

The global economy is expected to shrink 4.9% this year, against a 3% contraction in its April forecast, according to the IMF.

Hong said the government will spare no effort to achieve positive economic growth this year.

To that end, Hong renewed his calls to the National Assembly to approve the third supplementary budget bill by the end of this month.

Earlier this month, South Korea proposed its third additional budget plan worth 35.3 trillion won to help key industries cope with the economic blow from the coronavirus pandemic and protect jobs. (Yonhap)


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