South Korea to Revoke Stock Tax Reliefs, Raise Corporate Taxes, Tax Dividends Separately Amid Market Slump Under President Lee

South Korea's government has announced plans to revoke previous tax reliefs on stock investments and to tax dividends separately from other financial income, aiming to encourage higher dividend payouts. The Finance Ministry also plans to raise corporate income tax rates by one percentage point, adjusting the range to 10-25%, while considering increasing the capital gains tax threshold above the current 1 billion won level. Additionally, tax exemptions will be offered for investments in artificial intelligence and the cultural sector. These proposed tax changes come as part of a broader expansionary fiscal policy intended to support economic recovery under President Lee Jae Myung's administration. However, the market has reacted negatively, with South Korea’s stock market experiencing a slump following the announcement. The government’s move to roll back recent tax cuts on corporate income and stock investments has generated domestic discontent and could pose challenges to the president's policy agenda.