Opposition to Strengthened Stock Transfer Tax Criteria Surpasses 120,000 Signatures in National Petition

With the government's announcement to lower the threshold for imposing stock transfer income tax from 5 billion KRW (50 million KRW) to 1 billion KRW (10 million KRW) per item, over 120,000 citizens have joined a national petition opposing this change.

According to the National Assembly's public agreement petition platform, as of 2 PM on the 4th, the petition titled “Opposition to Lowering the Capital Gains Tax for Major Shareholders” has received approximately 124,000 signatures.

The petitioner stated, "I am petitioning to prevent the collapse of the KOSPI," pointing out the issues with strengthening the criteria for transfer income tax. Particularly, they explained, "Capital gains tax is a law that major shareholders can evade by simply selling at the end of the year," expressing concerns that mass sell-offs aimed at tax evasion could lead to stock price declines.

The petitioner also argued, "If the taxes are the same between the U.S. stock market and the domestic stock market, what kind of fool would invest in the domestic market?" They asserted that if large sell-offs for tax evasion purposes occur every year-end, the KOSPI cannot trend upwards like the U.S. market. This is seen as having negative effects on the competitiveness of the domestic stock market and the formation of a long-term investment culture.

If large sell-offs for tax evasion purposes occur every year-end, the KOSPI cannot trend upwards like the U.S. market.

The petition predicted that if the capital gains tax threshold is set at 1 billion KRW, investors would sell their stocks preemptively at levels such as 700 million KRW (7 million KRW) or 800 million KRW (8 million KRW) before reaching the threshold.

There are concerns that the government's current policy may disrupt the natural flow of the market and distort investment decisions.

The petitioner remarked, "It’s an unfair law that doesn’t even allow for profit and loss offsetting, is it necessary to pay capital gains tax just because one has a lot of money?"

They further pointed out the irrationality by stating, "It’s not the case that we pay taxes in the order of earning money in the domestic market; are we being taxed just for holding more shares?"

Finally, the petitioner appealed, "Please do not kick the ladder away at 1 billion KRW and help maintain a long-term investment culture in the domestic market; preserve the dream of ten-baggers (10x returns)."

Meanwhile, the Ministry of Economy and Finance announced on the 31st of last month in its 2024 tax reform plan that it would "restore the capital gains taxation system centered on a small number of major shareholders," reverting the criteria for major shareholders from the existing 5 billion KRW to 1 billion KRW. Following the announcement, the KOSPI index saw a nearly 4% drop on the 1st.

Image source: National Assembly National Agreement Petition, Lee Hyung-il, the Vice Minister of the Ministry of Economy and Finance, presenting key points during a detailed briefing on the '2025 Tax Reform Plan' held at the Government Sejong Center on the 29th. (Provided by the Ministry of Economy and Finance. Redistribution and database use prohibited) 2025.7.31 / News1, archival image for understanding the article / gettyimagesbank