The South Korean government announced plans on Wednesday to implement a package of financial policies aimed at providing support to stock investors and small business owners grappling with high-interest rates. These measures come three months before the country’s general elections, coinciding with the president’s series of policy discussion forums throughout the month.
As part of the financial support package, the government has decided to abandon its proposal to levy capital gains taxes on income exceeding 50 million won ($37,359.99) from stock investments. This plan, introduced by the previous administration, was scheduled to take effect next year. Currently, in South Korea, only “large shareholders” with stock holdings exceeding five billion won in a listed company are subject to capital gains tax, a threshold raised from one billion won in December of the previous year.
The Financial Services Commission, responsible for financial policies and regulations, stated that the government would further enhance stock short-selling rules to ensure a “level playing field” between retail and institutional investors.
To alleviate the impact of high-interest rates, local banks are set to return a total of 1.6 trillion won ($1.20 billion) in interest income to small businesses and self-employed individuals who have taken out loans. Additionally, for the approximately 2.9 million individuals facing overdue repayments on loans, the government plans to offer a “credit rating pardon” to support their return to economic activity with a clean financial record. These initiatives are part of the government’s broader efforts to address economic challenges and provide relief to various sectors of the population.