KOREA CAPITAL MARKET INSTITUTE

  On August 29, the Korean government unveiled its masterplan for taxation policy that proposes a clear direction toward a people-first economy and tax justice for the next five years. As the direction prioritizes innovative growth and tax equity, a major overhaul is expected in the taxation policy on the capital markets, a main growth engine for the economy. However, shaping out a more concrete masterplan requires tough challenges, such as how to secure expertise and earn public support.

  A taxation regime helping the capital markets to contribute to economic growth and to realize tax justice needs a systematic overhaul fully reflecting both developed countries’ experiences and Korea-specific conditions. This is especially so for the hotly debated issue of how to tax gains from investments in securities and derivatives. Such an overhaul should take place within a larger framework that shifts from taxation on financial transactions towards capital gains, as seen in the case of Japan. This will help alleviate the imbalance between the stock market’s transaction tax regime and the derivatives market’s capital gains tax regime. For tax justice, regulatory reforms are necessary to prevent taxpayers with high tax-bearing capacity from abusive tax avoidance. Last but not least, forward-looking measures such as tax benefits to long-term investment should be in place to help promising Korean companies to grow and drive economic growth in the Korean capital markets.

  Korea Capital Market Institute and Democratic Rep. Choi Woon-yeol will host a policy seminar to discuss the important issue under the title “A Better Tax System for Capital Gains on Financial Investment Products”. This seminar will bring together private sector experts as well as working level staff of the National Assembly, Financial Services Commission, and KOFIA to develop a better regime for taxing capital gains from financial investment products. We kindly request your participation in this event.