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South Korea to cut stock transaction tax this year
[SEOUL] South Korea's finance ministry and top market regulator said on Thursday they will cut the tax rate for stock trading this year in an effort to support domestic equity markets and startup firms.
Authorities will cut the trading tax for stocks listed in major Kospi and junior Kosdaq markets by 0.05 of a percentage point to 0.10 per cent and 0.25 per cent, respectively, while cutting the tax for Konex market by 0.2 of a percentage point to 0.1 per cent, a joint statement said.
However, authorities will maintain the special tax for rural development levied on Kospi transactions at 0.15 per cent, which would bring the combined tax on KOSPI transactions to 0.25 per cent.
The Konex stocks trading tax is expected to fall to 0.10 per cent according to statement, while the tax for unlisted shares will drop to 0.45 per cent.
The reforms on Kospi, Kosdaq and Konex taxes do not require parliamentary approvals, while the revision on unlisted shares do, a finance ministry official told Reuters.
In November, Financial Services Commission Chairman Choi Jong Ku said the government needs to "seriously consider" repealing the stock transactions tax as it could help boost the domestic equity markets.