South Korea scales back capital gains tax on stocks, hikes income tax for top earners

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South Korea on Wednesday scaled back plans to impose capital gains taxes on stock investments in response to complaints by retail investors, but said it will hike taxes for top earners as part of changes in its annual tax code revision.

FILE PHOTO: A man walks in a park at a business district in Seoul, South Korea, March 23, 2016. Picture taken on March 23, 2016. REUTERS/Kim Hong-Ji

The finance ministry also proposed to hike income tax on earnings exceeding 1 billion won a year to 45% from 42% currently, which will help offset the expected loss in revenue from changes in the capital gains tax. Policy tweaks aim to “better support retail investors and help them build up financial wealth amid low interest rate environment,” the ministry said in a statement.

South Korea’s retail investors poured over 30 trillion won into local shares in the first six months of the year, the largest on record for comparable periods.has gained more than 50% from the year's lows as investors seek to buy into a cheapened market, backed by ample liquidity amid record low interest rates.

 

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Should of just eliminated both

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