A tax reform proposal to lower the threshold for defining a “large shareholder” subject to capital gains tax on stock transactions—from ₩5 billion to ₩1 billion—is sparking growing debate within the ruling Democratic Party of Korea (DPK) as of the 2nd.
Amid a sharp decline in the domestic stock market, DPK floor leader and acting party chief Kim Byung-ki expressed the day before that the government’s announcement could be subject to review. In response, Policy Committee Chair Jin Sung-joon effectively voiced his opposition in a public statement on the 2nd.
Jin stated, “Many investors and experts claim that reversing the current capital gains tax threshold will collapse our stock market—but precedent shows otherwise.”
He continued, “Under the Park Geun-hye administration, the threshold was lowered from ₩10 billion per stock to ₩5 billion, then to ₩2.5 billion. Under the Moon Jae-in administration, it was further reduced from ₩2.5 billion to ₩1.5 billion, and then to ₩1 billion—but during all of that, there was hardly any fluctuation in stock prices.”
Jin added, “The Yoon Suk-yeol administration, claiming it was revitalizing the stock market, raised the threshold back up to ₩5 billion, but in fact, stock prices have continued to fall. Restoring the ₩1 billion threshold is part of rebuilding the tax revenue base that the Yoon administration dismantled.”
He emphasized that “the government must pursue a wide range of national policy tasks in a balanced and simultaneous manner, and to do so, it must also secure hundreds of trillions in funding.” He added that the party and government had “closely coordinated during the preparation of the tax reform plan and will continue to do so during parliamentary deliberations.”
Previously, Kim Byung-ki, the acting party chief and floor leader, had stated just a day after the government’s announcement that “within the party’s special committee on KOSPI 5000 and the committee for tax normalization, we will review the possibility of raising the ₩1 billion large shareholder threshold.”
His remarks came at a time when the stock market had experienced its sharpest drop in four months.
In response, Jin met with reporters at the Democratic Party convention in Kintex, Goyang, and said, “The plan is not finalized, so we must monitor the situation in the stock market before making a judgment,” but he added, “I don’t think the proposal is being shaken just because of Kim’s remarks.”
On July 31, the government announced its 2025 Tax Reform Plan, which includes reducing the capital gains tax threshold for large shareholders from ₩5 billion to ₩1 billion.
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