South Korean President Lee Halts Capital Gains Tax Reform Plans

South Korean President Lee Jae Myung announced that his administration will not pursue the proposed revision to capital gains taxes intended to increase revenue from stock investors by lowering the threshold for 'large shareholders' from 5 billion won to 1 billion won. The decision, made in response to strong public and investor opposition, defers the matter to parliament, where both the ruling Democratic Party and the main opposition People Power Party agree that the threshold should remain unchanged. Following Lee's announcement, the KOSPI stock index reversed earlier gains and fell, reflecting investor unease. Lee emphasized that while the tax revision was intended to revitalize the market, measures such as cracking down on unfair trading practices and encouraging the National Pension Service to increase domestic stock investments are priorities to address the undervaluation of Korean companies. The move illustrates the administration's responsiveness to public sentiment and its cautious approach to balancing tax reforms with market stability.