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Lee Kyung-min

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Economy

Korea unflinching about tax on cryptocurrency

By Lee Kyung-min The government said income derived from trading cryptocurrency will be subject to tax as planned, clearing way for the 20 percent tax on the gains made via digital currency that long remained a windfall, tax-free investment.Deputy Prime Minister and Finance Minister Hong Nam-ki said digital assets can be recognized as financial assets, backed by the entire transaction records to be preserved for taxation purposes. “The cryptocurrency market with 500 trillion won ($433 billion) in annual trading volume has long remained outside the tax authorities' scrutiny. That will no longer be the case following a revision of a related law,” Hong said during a government audit of the ministry at the National Assembly, Thursday.The ministry will impose the tax after recognizing the gains as “other income,” an easier way for the government to levy the tax as opposed to property tax.Property trading-derived capital gains are calculated by the difference between the value purchased and value sold at a particu

Oct 9, 2020By Lee Kyung-min
Korea unflinching about tax on cryptocurrency
Economy

Shinhan Financial mulls 'extra dividend' to limit share price drop

Shinhan Financial Group Chairman Cho Yong-byoung Korea Times fileBy Lee Kyung-minShinhan Financial Group is expected to pay extra dividends to shareholders, in a much-hurried move to prevent its share price from taking a further dive following a capital increase with consideration worth over 1.1 trillion won ($952 million), a corporate decision shunned by shareholders who view their visibility of return is undermined by devaluation of the shares.The move is considered a method of last resort, given its previous mention of profit-sharing after its Sept. 4 capital increase failed to dissuade shareholders from dumping their shares.At that time, Shinhan said the capital increase was part of an emergency plan to better counter the fallout of the COVID-19 pandemic and bolster capital capabilities before mergers and acquisitions (M&As). But shareholders continued to dump shares judging that per-share value dropped due to the greater number of stocks issued via the capital increase.How soon or whether the payments will materialize at all remains to be seen, as the bold move will entail h

Oct 8, 2020By Lee Kyung-min
Shinhan Financial mulls 'extra dividend' to limit share price drop
Economy

KDI criticizes efficacy of corporate tax policy

The logo of the Korea Development Institute (KDI) Courtesy of KDIBy Lee Kyung-min The government policy of imposing an additional tax of 20 percent on up to 35 percent of corporate net income retained in the form of reserves should be abolished or undergo a major revision due to its clear lack of efficacy, a state think tank said Wednesday.Little of the intended outcome will be drawn from the policy, the Korea Development Institute (KDI) said, recommending that the key policy objective ― economic vibrancy defined by greater private investment and job creation ― be achieved via greater tax incentives instead of what businesses consider a punitive tax that disincentivizes entrepreneurship. The policy first implemented in 2015 was revised in 2018 to exclude dividends and land investments as deductibles.Despite the recommendation, however, the Ministry of Economy and Finance submitted a bill to the National Assembly seeking to extend the policy for two more years, with the minimum amount deductible decreased further to 30 percent from the current 35 percent, starting 2021.The policy led

Oct 7, 2020By Lee Kyung-min
KDI criticizes efficacy of corporate tax policy
Economy

Yanolja with newfound growth potential seeks stock listing in 2021

Yanolja founder and CEO Lee Su-jin / Courtesy of YanoljaBy Lee Kyung-min Yanolja, the fast-growing operator of a travel and lodgings service platform here, is planning for a stock listing from scratch, in a revised strategy seeking a proper corporate valuation due to its rising growth potential as seen by a combined $180 million (213 billion won) investment by the Singaporean sovereign wealth fund and a global travel reservation app operator, industry sources said.GIC Private Limited, formerly the Government of Singapore Investment Corporation, and Booking Holdings, a NASDAQ-listed American travel service platform operator valued the Korean firm at around 1 trillion won in June 2019, an assessment which could be bolstered given that its domestic and global earnings doubled and quadrupled, respectively in 2019, year-on-year.The Korean firm recently sent a request for proposal (RFP) to five local and global brokerages, a prerequisite to selecting an underwriter for an initial public offering (IPO).“We want to have the stocks listed by the end of 2021, a process that will require

Oct 6, 2020By Lee Kyung-min
Yanolja with newfound growth potential seeks stock listing in 2021
Economy

Rising food prices trouble households

Statistics Korea official Ahn Hyung-joon speaks during a briefing at the Sejong Government Complex, Tuesday. YonhapBy Lee Kyung-min A mother of two children, surnamed Park, is afraid to go grocery shopping, as the prices of most agricultural produce have jumped sharply.“Almost all food prices have increased,” she said. “I thought having meals at home instead of eating out due to the COVID-19 pandemic seemed an economical choice, but not so much now that the grocery prices are far higher.”The concern largely shared by many families results from the consumer price of agricultural produce spiking 13.5 percent in September year-on-year, driven by a 34.7 percent year-on-year increase in vegetable prices. Meat and fisheries produce jumped 7.3 percent and 6 percent, respectively.According to Statistics Korea, the September increase of 13.5 percent was the highest jump in nine and a half years after March 2011 when the figure was 14.6 percent.The agency said the consumer prices inched up 1 percent last month compared to a year earlier, a recovery that came six months

Oct 6, 2020By Lee Kyung-min
Rising food prices trouble households
Economy

Experts question efficacy of gov't measures to bolster fiscal soundness

Deputy Prime Minister and Finance Minister Hong Nam-ki, left, speaks during a press briefing at Sejong Government Complex, Monday. YonhapObjective to keep debt-to-GDP ratio lower than 60%, deficit less than 3% of GDPBy Lee Kyung-min The government has outlined a long-term fiscal plan, Monday, as part of preemptive measures to better manage fast-growing debt amid rising mandatory spending brought on by expanded social and welfare programs due to the rapidly aging population.A sweeping further effort will be required to reduce expenditure by scrapping redundant, counter-effective state-run projects, a move pivotal to reduce fiscal deficit soaring rapidly without little improvement in overall productivity.Altering specifics to ease related rules will be banned in principle unless the government presents ways to increase revenue, a buffer that will help limit arbitrary fiscal discretion expanding gradually in line with continued expansionary policy directives over the past few years.Experts question the efficacy of the slew of measures set to take effect in 2025, as they merely function

Oct 5, 2020By Lee Kyung-min
Experts question efficacy of gov't measures to bolster fiscal soundness
Economy

Financial heads to face tight scrutiny at Assembly audit

National Policy Committee is in session at the National Assembly, Sept 22. Korea Times file By Lee Kyung-minHeads of state-run and private financial organizations will undergo rigorous scrutiny at the upcoming National Assembly audit over a slew of botched financial policies highlighted by a failure to maintain political neutrality, and employee indiscretions, according to industry sources, Sunday. Under the tightest scrutiny will be fiascos involving derivative-linked funds (DLF) and funds unredeemed due to mismanagement of private equity funds (PEFs) and their operators. The former is a highly complicated, intricately structured derivative financial product and the latter an alternative investment class consisting of capital not listed on publicly exchange. Both led to immense investor losses with many senior citizens having lost their entire retirement savings.The National Policy Committee under the National Assembly ― a standing committee responsible for the ov

Oct 4, 2020By Lee Kyung-min
Financial heads to face tight scrutiny at Assembly audit
Economy

Growing labor voices major headache to financial firms

Democratic Party of Korea (DPK) Chairman Lee Nak-yon, left, listens to supportive remarks from Park Hong-bae, then-head of the Korean Financial Industry Union (KFIU), at the National Assembly, April 2. Korea Times fileRuling, minor opposition parties seek greater labor influence By Lee Kyung-min The ruling and minor opposition parties are seeking to legislate a bill that will require financial firms to have a member put forward by their union to sit on executive recommendation committees, in the latest move to gain a greater say in corporate management.The move is in line with attempts by unions at financial firms to recommend outside directors to company boards, a stepping stone to the appointment of a labor director to ensure labor participation in corporate management. It was a presidential election pledge, but has lost steam amid fast-souring public sentiment over the administration's series of failed drives, notably its real estate policies.Union members say a rise in representation is needed to promote the public good. But experts say corporate efficiency will be undermined due

Oct 2, 2020By Lee Kyung-min
Growing labor voices major headache to financial firms
Economy

V-shaped economic recovery becomes elusive

GettyimagesbankChuseok critical juncture for virus containment By Lee Kyung-min The Korean economy will not be able to recover in the third quarter despite previous expectations due to record-long heavy rainfall and stricter social distancing put in place to prevent further spread of COVID-19 following an Aug. 15 rally in Seoul, experts said Monday.The gloomier-than-expected assessment bodes ill for Asia's fourth-largest economy, which was previously expected to report a V-shaped recovery after bottoming out in the second quarter.Experts say the economy is likely to contract up to 3 percent quarter-on-quarter, if the virus spreads during the Chuseok holiday which will begin Sept. 30 and continue through Oct. 4, during which many families from all over the country come together. Health authorities advised against visiting family and travelling for the 5-day holiday.“The economy is certain to contract. It's now a matter of the degree,” Seoul National University economist Kim So-young said.The Bank of Korea said Aug. 27 that the economy will contract 1.3 percent in

Sep 28, 2020By Lee Kyung-min
V-shaped economic recovery becomes elusive
Economy

Korean New Deal Fund to invest in renewables, blockchain tech and 5G

Deputy Prime Minister and Finance Minister Hong Nam-ki, second from right, speaks during a ministerial-level meeting at Seoul Government Complex in Gwanghwamun, Monday. YonhapInfrastucture Fund specified to advance digital, green projectsBy Lee Kyung-min The government will invest in 197 digital and green projects in 40 sectors via the Korean New Deal Fund, a government policy fund of 20 trillion won ($17 billion) designed to promote the Korean New Deal, defined by 160 trillion won of investments in the two sustainable growth areas. Of the 20 trillion won, a third, or 7 trillion won, will be from government spending (3 trillion won) and state-run lenders (4 trillion won), with the remaining 13 trillion won to come from a private investors' pool. “Necessary changes will be made including spending plans and law revisions to help effective management and operation of the fund,” Deputy Prime Minister and Finance Minister Hong Nam-ki said during a ministerial-level meeting at Seoul Government Complex in Gwanghwamun, Monday.The fund will be backed by the New Deal Infrastructure

Sep 28, 2020By Lee Kyung-min
Korean New Deal Fund to invest in renewables, blockchain tech and 5G
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