Overview

• The Finance Ministry’s plan boosts the top corporate tax rate to 25% from 24% and raises the securities transaction tax to 0.20% from 0.15%.
• It lowers the capital gains threshold for major shareholders from 5 billion won to 1 billion won, prompting a petition with over 135,000 signatures and ruling party proposals for alternatives.
• Foreign investors dumped about 573 billion won in the two trading days after the announcement, triggering a 3.9% one-day Kospi drop and a modest 0.9% rebound.
• Citigroup, Goldman Sachs and CLSA warned that heavier tax burdens and policy inconsistency threaten investor confidence and could extend market volatility.
• Democratic Party lawmakers are drafting amendments as major domestic brokerages forecast a prolonged market correction.