‘2% of all investors’ benefit only a small number of large investors… “Tax consistency must be maintained” pointed out
Taxation starts next year… I need to change the law this year, but there is no clear outline
Ahead of next year’s financial investment income taxation, President-elect Yoon Seok-yeol advocated for the abolition of the stock transfer tax, raising controversy.
In order to fulfill the pledge to abolish the stock transfer tax, the tax law must be revised within this year, and opposition from the opposition parties in the Yeosoya National Assembly is also a mountain to overcome.
◇ Abolition of stock transfer tax on ‘fire in the foot’… The law should be revised within this year.
According to the presidential election pledges on the 16th, President-elect Yoon presented a pledge to abolish the stock transfer tax to strengthen support for individual investors.
However, the specific direction or method of its abolition has not yet been prepared.
The Presidential Transition Committee (Acquisition Committee) has only announced its policy of amicably negotiating with government ministries on economic promises such as the abolition of the stock transfer tax in the future.
The problem is that taxation of financial investment income, including stocks, will start from next year.
From 2023, investors who have earned more than a certain amount (50 million won in stocks and 2.5 million won in other) through financial investments, such as stocks, bonds, funds, and derivatives, will have to pay a 20% tax (25% for more than 300 million won).
This means that in order for President-elect Yoon to fulfill his promise, he will have to complete the revision of the relevant tax law within this year.
◇ Excluding only stocks among financial investment income vs. self-abolition of taxation on financial investment income
There are two main ways to abolish the stock transfer tax.
First, there is a way to exclude only stocks from the scope of financial investment income that is scheduled to be taxed in 2023.
In this case, the backbone of the financial tax system introduced after long discussion can be maintained, but as the taxation of other financial investment products such as bonds and funds proceeds as scheduled, there is a possibility of raising a controversy over equity.
An official from the financial investment industry pointed out, “Financial investment income includes not only listed stocks, but also various types of financial investment products such as bonds, derivatives, and funds. did.
Alternatively, the taxation on financial investment income could be abolished altogether.
It is a method of abolishing the current large shareholder taxation system while making the taxation of financial investment income a non-existent task.
In this case, the controversy over equity among financial product investors will be resolved.
In addition, large shareholders, who are currently subject to transfer tax, are also exempt from tax obligations.
Under the current tax law, stockholders who own 1 billion won or more of listed stocks or have a stock holding ratio of a certain size (KOSPI 1%, KOSDAQ 2%, KONEX 4%) are classified as ‘major shareholders’ and taxed. The idea is to ensure that no one pays taxes, regardless of how much money they have.
However, in this case, the issue of equity between financial investment income and labor/business income may be raised.
It is pointed out that the scope of non-taxation of financial investment income is too wide compared to other income, and it is against the principle of ‘where there is income there is tax’.
◇ Only 2% of investors are likely to benefit… Detergent Consistency Criterion
Furthermore, some critics say that the pledge to abolish the stock transfer tax only benefits a small number of large investors.
This is because, in the case of stocks, tax is levied only on the gains from transfers of more than 50 million won.
According to the thesis ‘Tax Revenue Effect of the Introduction of Financial Investment Income Tax’ published in the ‘Budget Policy Research’ Vol. It was estimated that only about 90,000 people, or 2% of the
Among these, it can be interpreted that only 2% of all investors will benefit if the taxation on financial investment income is abolished.
Inconsistency in the financial tax system is also a problem.
An industry official pointed out, “After many discussions over the past 10 years, the securities transaction tax has been abolished in the long term and the stock transfer tax has been designed in a way that replaces the transaction tax, so I think the consistency of these taxes needs to be respected.” .
◇ The Democratic Party also “inevitably expands stock transfer tax”… Individual investor opinion matters
The Democratic Party of Korea also has a negative stance on the abolition of the stock transfer tax.
Former Gyeonggi governor Lee Jae-myung, who was a candidate for the Democratic Party’s presidential election, previously mentioned that the increase in the stock transfer tax was “unavoidable”, and in this regard, he also left a six-letter message on Facebook saying “opposition to tax cuts for the rich”.
In the end, it seems that fierce debate will inevitably arise until the Yeosoya University National Assembly proceeds with the revision of the tax law to abolish the stock transfer tax.
However, we cannot rule out the possibility that the political circles may change their position depending on the reaction of individual investors negatively to the stock transfer tax.
In fact, in the case of virtual assets, which are subject to taxation from 2023, it is highly likely that the scope of non-taxation will be greatly expanded due to a bipartisan agreement that has been pushed back by investor opinion.
During the previous presidential election, the two parties had already promised to expand the tax-free range of investment income in virtual assets to 50 million won.
The government is of the view that there is no reason to provide additional benefits to investment in virtual assets, which are simple intangible assets, unlike stock investment, which is beneficial to the Korean economy. am.
/yunhap news
