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

President Lee Jae-myung recently ordered a total re-examination of two specific bills included in the government's tax reform proposal.

One is the revision bill for the Individual Comprehensive Asset Management Account (ISA), and the other is the 'anti-stock suppression bill'.

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

According to political circles, President Lee received a report on the contents of the bills and the public backlash during a situation review meeting with presidential aides on the morning of August 7.

Regarding the ISA revision bill, President Lee rebuked, "Why did you do that without accurate preparation?" and ordered, "Re-examine it entirely."

Subsequently, regarding the anti-stock suppression bill, he instructed, "Why was the system designed in such a way that it failed to preserve the original intent of the reform? Look into this again as well."

The current ISA revision proposal includes establishing a productive financial ISA limited to domestic investment. However, as it decided to abolish the limit carryover system and shorten the contract period for the existing ISA scheme, fierce backlash erupted among investors, including young people and 'Seohak ants' (retail investors investing in foreign stocks).

The ISA is widely utilized by retail investors as a tax-saving and wealth-accumulation vehicle because it provides tax exemption benefits on interest and dividend income. Criticism has been raised that the revision proposal narrows their choices and benefits, and furthermore forces domestic stock investment.

Controversy surrounds the anti-stock suppression bill as well.

The proposal stipulates that if corporate owners are caught deliberately depressing stock prices to reduce inheritance and gift taxes, taxes will be imposed by artificially raising the stock value by at least 30%. However, critics argue that the criteria designed to identify such companies could rather encourage loopholes.

The government proposal specified the criteria for detection as having a price-to-book ratio (PBR) in the bottom 25% by Kospi industry sector or bottom 10% for Kosdaq during 12 out of the most recent 13 half-years. Critics argued this could distort stock prices since companies are likely to manage their PBR rankings only during certain periods.

In particular, public criticism of this anti-stock suppression bill had previously been voiced even within the ruling party.

Regarding President Lee's order for a complete re-examination, political circles expect that complementary measures will be made to reflect such opinions during the parliamentary deliberation process.

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