Gov't to leave capital gains tax threshold for stock investment unchanged: minister

Finance Minister Koo Yun-cheol, left, speaks at a policy consultation meeting between the government and the ruling Democratic Party held at the National Assembly in western Seoul, Sept. 15. Yonhap

The government has decided to keep the threshold for capital gains tax on stock holdings at the current level of 5 billion won ($3.6 million), Finance Minister Koo Yun-cheol said Monday.

In July, the Ministry of Economy and Finance had proposed lowering the threshold to 1 billion won from the current 5 billion won, stoking concerns of a potential decline in investor sentiment among financial circles.

Koo said the government decided to keep the current criteria for major shareholders considering the "public's desire" and the call from the ruling Democratic Party of Korea (DPK) for measures to boost the capital market.

"Since announcing the tax reform plan in July, we gave a lot of thought into the criteria for major shareholders subject to capital gains tax on stock transactions, pondering the need for tax normalization and the need to revitalize the capital market," Koo said during a policy consultation meeting between the government and the DP.

"The government will do its utmost to support the growth of companies and the national economy through revitalization of the capital market and productive finance," the minister added.

Koo's comments came after President Lee Jae Myung said at a press conference last week that there was "no need to insist" on the proposal if it ends up hurting investor sentiment.