Decision to keep 5 billion won threshold ends weeks of turmoil but raises doubts about long-term fiscal discipline
South Korea’s finance ministry’s decision to keep the capital gains tax threshold for major shareholders at $3.6 million (5 billion won) exposes the Lee Jae-myung administration to questions over fiscal credibility and long-term revenue stability, despite relieving immediate pressure on the equity market.
The abrupt reversal of a July plan to tighten the definition of a major shareholder removes a key source of investor anxiety but highlights the tension between market confidence and the government’s pledge to secure new funding for social and industrial programs.
South Korea’s finance ministry’s decision to keep the capital gains tax threshold for major shareholders at $3.6 million (5 billion won) exposes the Lee Jae-myung administration to questions over fiscal credibility and long-term revenue stability, despite relieving immediate pressure on the equity market.
The abrupt reversal of a July plan to tighten the definition of a major shareholder removes a key source of investor anxiety but highlights the tension between market confidence and the government’s pledge to secure new funding for social and industrial programs.
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