"Why Did You Do That?" President Rebukes ISA and Anti-Stock-Suppression Bills

President Lee Jae-myung recently ordered a complete overhaul of two specific bills included in the government's tax reform package, instructing officials to review them from scratch.

One is the reform plan for Individual Comprehensive Asset Management Accounts (ISA), and the other is the "anti-stock-suppression bill."

Both bills are related to the stock market, and the move is interpreted as taking into account the fierce criticism from young people and investors.

According to political circles and other sources, President Lee received reports on the contents of the bills and the public backlash during a situation-check meeting with presidential aides on the morning of August 7.

Regarding the ISA reform plan, President Lee rebuked officials, asking, "Why did you do that without proper preparation?" and ordered, "Review it entirely from scratch."

Turning to the anti-stock-suppression bill, he instructed, "Why did you design the system in a way that fails to live up to its original reform intent? Look into this again as well."

The current ISA reform plan includes establishing a productive financial ISA restricted to domestic investments. However, it also decided to abolish the limit-carryover system and shorten contract periods for existing ISA schemes, triggering intense backlash from young investors and "Seohak ants" (Korean retail investors investing overseas).

Because ISAs offer tax exemption benefits on interest and dividend income, they are widely used by retail investors as a tool for tax saving and wealth accumulation. Critics have argued that the reform plan narrows their choices and benefits, and even forces domestic stock investments.

The anti-stock-suppression bill has faced similar controversy.

The bill stipulates that if corporate owners are caught intentionally lowering stock prices to reduce inheritance and gift taxes, taxes will be levied by increasing the stock value by at least 30%. However, critics argue that the criteria created to screen for such companies could actually encourage loopholes.

The government's proposal defines screening criteria as cases where the price-to-book ratio (PBR) falls into the bottom 25% by Kospi industry or the bottom 10% on the Kosdaq for 12 out of the recent 13 half-years. Critics argue that this could distort stock prices, as companies are likely to manage their PBR rankings only during certain periods.

The anti-stock-suppression bill has previously drawn public criticism even from within the ruling party.

Regarding President Lee's order for a complete review, political circles expect that such opinions will be reflected and complemented during the parliamentary deliberation process.

Reported by Jo Gi-ho | Video by Na Hong-hee | Graphics by Lee Jeong-ju | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.