Moon pushes for tax policies to encourage stock investments

President Moon Jae-in of South Korea stressed that government policies such as taxation should encourage retail stock investors to boost the country's equity market.

Moon, responding to the plan to expand capital gains taxes for retail investors, said that policies should not shrink the stock market or discourage retail investors.

He added that it's time to encourage retail investors who have propped up the local stock market amid the pandemic.

The finance ministry plans to impose 20 to 25 percent of taxes on annual capital gains for retail investors beginning 2023.

Under the plan, all investors holding listed stocks are subject to a tax rate of at least 20 percent, which increases to 25 percent for those holding over 300 million won.

However, investors whose earnings from stock transactions are below 20 million won are exempt.

South Korea currently levies a capital gains tax to those owning stocks worth over one billion won in a single company.

The country has around six million retail investors as of 2019, with five percent or 300,000 being taxed under the revised tax code.

Moon's remarks are expected to influence the finance ministry's plan.