South Korea’s equity benchmark tumbled the most since early April after the government proposed higher taxes on corporations and stock investors in a bid to shore up revenue.The Kospi led losses in Asia on Friday, slumping as much as 3.1%. SK Hynix Inc. and Hanwha Aerospace Co. were among the biggest drags.
The threshold for capital gains tax on stock holdings would drop to 1 billion won ($723,312) from 5 billion won and stock transaction tax would increase to 0.2% from 0.15%, according to a proposal released by the finance ministry in Seoul Thursday.
The top corporate tax rate would rise to 25% from 24%, reversing a cut by the previous administration, according to the proposal. Rates across all corporate tax brackets would rise by 1 percentage point.With the proposed decrease in the threshold for capital gains tax, the number of taxable investors will significantly increase and that is causing concerns over a surge in selling, said Namho Kim, general manager at Timefolio Investment Management Co. in Seoul.
The threshold for capital gains tax on stock holdings would drop to 1 billion won ($723,312) from 5 billion won and stock transaction tax would increase to 0.2% from 0.15%, according to a proposal released by the finance ministry in Seoul Thursday.
The top corporate tax rate would rise to 25% from 24%, reversing a cut by the previous administration, according to the proposal. Rates across all corporate tax brackets would rise by 1 percentage point.With the proposed decrease in the threshold for capital gains tax, the number of taxable investors will significantly increase and that is causing concerns over a surge in selling, said Namho Kim, general manager at Timefolio Investment Management Co. in Seoul.
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