The Democratic Party of Korea has officially adopted the abolition of the financial investment income tax (금투세) as its party policy on November 4. During a Supreme Council meeting at the National Assembly, Democratic Party leader Lee Jae-myung stated, “Regrettably, we have agreed to the government’s and ruling party’s push to abolish the금투세.” He explained that, while it would be ideal to adhere to principles and values even if it involves hardships, the current situation of the South Korean stock market and the 15 million stock investors relying on it cannot be ignored.
Lee further cited the ruling party’s attacks on the opposition using the 금투세 policy as a reason for the decision. He expressed concern that postponing or offering a partial implementation might perpetuate political strife. Acknowledging criticism from progressive circles for compromising on principles and values, Lee pledged efforts to address the issue moving forward.
In addition to agreeing to abolish the 금투세, the party also aims to expedite corporate law reforms. Lee stated that the Democratic Party would focus on legislative and advanced stock market policies to stabilize the stock market and support corporate fundraising and public investments. He specifically mentioned plans to amend the statutory duty of loyalty provisions under the current commercial law during the current regular parliamentary session to prevent ‘stripping out the core.’
Lee emphasized the need for the stock market to become a transparent and fair fundraising market, preventing abuses by major shareholders and enhancing economic trust in South Korean enterprises. He criticized the government’s contrasting policies and expressed disappointment.
While adopting the abolition of 금투세 as party policy, Lee clarified that, principially, implementation would be justified. He stressed that the fundamental principle of imposing taxes on income should apply to capital income, just as it does for earned income. He explained that the 금투세 was introduced to replace or reduce transaction taxes. Lee argued that government policies, rather than the금투세, are the primary causes of stock price declines.