Govt, ruling party in S. Korea agree to deliberate on controversial capital gains tax

Seoul, Aug 10 (IANS) The government and the ruling Democratic Party (DP) agreed on Sunday to deliberate on the Lee Jae Myung administration's recent proposal to broaden the definition of large shareholders to increase capital gains tax revenues.

The two sides held a high-level meeting presided over by Prime Minister Kim Min-seok at his official residence and discussed the controversial proposal to lower the threshold for being classified as a large shareholder from 5 billion won (US$3.59 million) to 1 billion won, DP senior spokesperson Rep. Park Soo-hyun said at a press briefing, reports Yonhap news agency.

If finalised, the measure would be a reversal of the previous administration's decision to raise the threshold from 1 billion won to 5 billion won in order to ease capital gains tax obligations.

"The party and the government consulted and coordinated closely and decided to deliberate on the issue while watching future developments," Park said, adding the party's policy committee conveyed its opinion on the proposal to the government.

The two sides also discussed follow-up measures to South Korea and the United States' recent trade deal, agreeing to provide support to industries and businesses likely to be hit hardest by the new U.S. tariffs, according to Park.

He said the party requested the government thoroughly pursue ways for South Korean businesses to enter the U.S. market while conducting negotiations with Washington on when to lower auto tariffs.

In addition, the party asked that the government prepare meticulously for the Asia-Pacific Economic Cooperation summit to be held in the southeastern city of Gyeongju in October.

Meanwhile, South Korean stocks tumbled at the steepest pace in nearly four months earlier this month as investor sentiment was dragged down by the government's tax revision proposal to raise taxes on corporations and stock investors. The local currency lost sharply against the U.S. dollar to top the 1,400-won line for the first time since May.

—IANS

na/