Economy - The Korea Times

Lee gov't unveils 1st tax reform plan aimed at increasing revenue

The government on Thursday unveiled a comprehensive tax reform plan aimed at strengthening the national revenue base, which includes raising the top corporate tax rate and tightening capital gains taxation by broadening the definition of large shareholders. The reform marks the first major tax overhaul under President Lee Jae Myung, who took office early last month, and comes as part of the administration's efforts to restore fiscal soundness and address what it sees as tax benefits tilted toward large corporations and high-income earners. The government estimates the reform package will generate an additional 8.17 trillion won ($5.87 billion) in tax revenue over the next five years. According to the Ministry of Economy and Finance, the top corporate tax rate will be raised by 1 percentage point across all four tax brackets, effectively rolling back cuts introduced by the previous Yoon Suk Yeol administration in 2022. Currently, the corporate income tax is levied at 9 percent for an annual income of up to 200 million won, 19 percent for income between 200 million and 20 billion won, 21 p

Jul 31, 2025By Yonhap

Lee gov't unveils 1st tax reform plan aimed at increasing revenue

Lee vows to ease punitive regulations on businesses to restore investor confidence

President Lee Jae Myung pledged Wednesday to swiftly launch a government task force to review and revise criminal penalties concerning business activities, aiming to ensure that "excessive" sanctions do not discourage corporate management. In particular, Lee vowed to prevent the overuse of breach of trust charges, which have often been cited as a major hurdle to domestic investment by foreign investors. This pro-business stance is widely seen as an action to mitigate concerns from business circles about the ruling bloc's "pro-labor" push, following the recent promulgation of the revised Commercial Act, additional moves to introduce tougher clauses and a push to amend the Trade Union and Labor Relations Adjustment Act — all of which business groups claim will undermine the industrial competitiveness of domestic companies. The president made the comments during an emergency economic response meeting at the presidential office. "Concerns have been raised that [foreign] businesspeople are reluctant to invest in Korea because even minor missteps could lead to imprisonment," Lee said. "We ne

Jul 30, 2025By Jun Ji-hye

Lee vows to ease punitive regulations on businesses to restore investor confidence

PHOTO Joint push against stock manipulation

Kwon Dae-young, left, vice chairman of the Financial Services Commission (FSC), poses with other participants during a nameplate unveiling ceremony for a joint task force to root out stock manipulation at the Korea Exchange in Seoul, Wednesday. The team, comprising officials from the FSC, the Financial Supervisory Service and the Korea Exchange, was created in response to President Lee Jae Myung's call for stern measures against unfair trading practices as part of efforts to boost the local financial market. Yonhap

Jul 30, 2025By Jun Ji-hye

[PHOTO] Joint push against stock manipulation

Gov't, ruling party decides to raise corporate tax rate back to 25%

The government and the ruling Democratic Party of Korea (DPK) agreed Tuesday to increase the corporate tax rate back to 25 percent, reversing a cut in such taxes made under the previous Yoon Suk Yeol administration in 2022. During their policy consultations on tax reform, the two sides also decided to lower the capital gains tax threshold for major shareholders from 5 billion won ($3.6 million) to 1 billion won, rolling back Yoon's policy that was aimed at boosting investor sentiment. Under the plan, the top corporate tax rate will be raised from 24 percent to 25 percent, restoring it to the level before the Yoon administration's tax cut. The conservative Yoon administration had reduced the rate to 24 percent during its first year in office in an effort to help local firms boost investment. The corporate tax rate was previously lowered from 25 percent to 22 percent in 2009 under the Lee Myung-bak administration, then raised again to 25 percent in 2017 under the liberal Moon Jae-in government, before being lowered to 24 percent under Yoon. The move is part of President Lee Jae Myung's broa

Jul 29, 2025By Yonhap

Gov't, ruling party decides to raise corporate tax rate back to 25%

Tax hike policies feared to derail Lee's pledge to push KOSPI above 5,000

The government is facing a dilemma over its plan to hike the capital gains tax on stock investments, which could undermine the benchmark KOSPI from reaching a 5,000-point milestone as pledged by President Lee Jae Myung, economists said Thursday. The Ministry of Economy and Finance is considering tighter rules on capital gains taxes by lowering the minimum gains from the current 5 billion won ($3.65 million) to 1 billion won. Aimed at securing tax revenues, this plan is a revival of the 2017-22 Moon Jae-in administration’s policy that went after major shareholders to collect more taxable income. A higher capital gains tax, however, has been considered a culprit behind the longstanding discount in stock market valuations, as major shareholders dumped their shares at year’s end to avoid taxation. The unloaded amount was large enough to rattle the market. In 2023, then-President Yoon Suk Yeol raised the capital gains tax threshold from 1 billion won to 5 billion won to enliven investor sentiment. “Against this backdrop, it is easily predictable that major shareholders will unload their

Jul 24, 2025By Yi Whan-woo

Tax hike policies feared to derail Lee's pledge to push KOSPI above 5,000

More foreigners own homes in Seoul as Koreans face tightened lending rules

More foreigners are buying homes in Seoul in the wake of the government’s latest lending rule that only makes it tougher for Koreans to own a house, government data showed Wednesday. Compiled by the Supreme Court, the data deals with registered transactions, legal ownership rights and other information concerning real estate nationwide. It reported a total of 120 cases of foreigners purchasing homes in the capital city from July 1 to 18, up 14.3 percent from a month earlier. By nationality, the buyers included 57 Chinese, 35 Americans and eight Canadians. In contrast, the number of home purchases by Koreans dropped 27.2 percent to 7,632 over the same time period. The drop came after government measures to limit the cap on mortgage loans up to 600 million won ($435,500) came into effect on June 27. It was intended to curb rising home prices in Seoul, which soared as part of a “honeymoon effect” after President Lee Jae Myung took office on June 4. The measure was unusually aggressive, because, unlike previous lending rules, it restricted the maximum loan amount regardless of buyers’

Jul 23, 2025By Yi Whan-woo

More foreigners own homes in Seoul as Koreans face tightened lending rules

Government cracks down on resale of cash handouts amid misuse concerns

Shortly after the first-round applications for the government's voucher-based cash handouts began nationwide Monday, multiple cases of the benefits being resold and purchased at discounted prices on secondhand online marketplaces have been reported, government officials said Tuesday. This raises concerns that the original purpose of the program — to stimulate domestic consumption and revitalize local economies — may be significantly undermined, prompting officials and online resale platforms to tighten oversight. According to the Ministry of the Interior and Safety, individuals caught reselling the cash handouts, called "consumption coupons," for cash could face up to three years in prison. Under the government initiative unveiled on June 19, every Korean citizen living in the country as of June 18 is eligible for a one-time benefit of 150,000 won ($108). Additional financial support will be distributed selectively based on income brackets. Recipients can choose how to receive the payment, with options including credit or debit cards, prepaid cards or gift certificates issued by loca

Jul 22, 2025By Jun Ji-hye

Government cracks down on resale of cash handouts amid misuse concerns

Korea set to raise stock transaction tax to offset declining tax revenue

The Lee Jae Myung government is expected to increase the securities transaction tax as it moves to roll back the tax-cut policies of the previous Yoon Suk Yeol administration, government and industry officials said Monday. The securities transaction tax is levied regardless of whether the seller makes a profit. The proposed hike is seen as a measure to offset declining tax revenues following the failure to implement the financial investment income tax, which had been considered a key prerequisite for lowering the transaction tax. Previously, the Moon Jae-in administration had planned to introduce a financial investment income tax targeting realized gains and, to avoid double taxation, intended to gradually lower and eventually abolish the securities transaction tax. However, the implementation of the financial investment income tax was first delayed and then ultimately scrapped under the Yoon administration, prompting renewed calls to restore the previously reduced securities transaction tax. Currently, the securities transaction tax rate for KOSPI trades is significantly lowered, effecti

Jul 21, 2025By Jun Ji-hye

Korea set to raise stock transaction tax to offset declining tax revenue

Should Korea increase corporate taxes?

The debate over a corporate tax hike is reigniting, as Economy and Finance Minister nominee Koo Yun-cheol and the ruling Democratic Party of Korea are signaling support for placing a heavier tax burden on businesses, officials said Friday. At his confirmation hearing Thursday, Koo acknowledged concerns from ruling party lawmakers over the sharp decline in corporate tax revenue in recent years. He said he would "actively and comprehensively review" restoring the top corporate tax rate to 25 percent, reversing the cut made by the Yoon Suk Yeol administration in 2022 from 25 percent to 24 percent. "I will weigh considerations such as taxpayers' ability to pay and the broader economic impact," Koo said. He openly criticized the previous tax-cut policy, noting that corporate tax revenue had plunged by 40 percent from about 100 trillion won ($72 billion) in 2022 to little more than 60 trillion won last year. "The tax cuts were intended to spark a virtuous cycle of increased corporate investment, but instead, we are seeing a downturn in growth, consumption and investment," he said. The country's

Jul 18, 2025By Jun Ji-hye

Ex-Meritz Fire CEO accused of insider trading over merger plan

Financial authorities are ramping up enforcement against individuals suspected of disrupting capital markets, following President Lee Jae Myung's warning of tough penalties for market manipulation, officials said Thursday. The Financial Services Commission (FSC), the country's top financial regulator, said that its Securities and Futures Commission (SFC) has referred the former CEO of Meritz Fire & Marine Insurance to prosecutors for allegedly profiting from undisclosed merger information. The SFC also referred Bang Si-hyuk, founder and chairman of HYBE, the K-pop powerhouse behind BTS, to prosecutors for allegedly misleading investors during the company's initial public offering and gaining unlawful profits. During a meeting on Wednesday, the SFC decided to refer a former CEO-level official and another senior executive from Meritz Fire to the prosecution on charges of using nonpublic, material information. Referring suspects to prosecutors represents the harshest penalty available to financial authorities under the Capital Markets Act. They are accused of buying a significant amount of s

Jul 17, 2025By Jun Ji-hye

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