SEOUL, August 08 (AJP) - South Korean President Lee Jae Myung has ordered a review of proposed changes to the country's Individual Savings Account (ISA) system and a tax measure aimed at preventing controlling shareholders from suppressing stock prices, following criticism from investors and lawmakers.
Lee instructed officials on Friday to reconsider the two proposals included in the government's recently announced tax revision package, according to political sources.
The move came after the proposed ISA overhaul drew criticism from retail investors, particularly younger savers, while the stock-price measure faced questions over whether it would be effective in its current form.
The ISA proposal would abolish the carryover of unused annual contribution limits and shorten contract periods, changes critics say would weaken incentives for long-term investment.
The proposed stock-price measure is intended to discourage controlling shareholders from keeping share prices artificially low to reduce inheritance and gift tax burdens. Some lawmakers, however, argued that the government's version applies to a much narrower range of cases than an earlier proposal submitted by ruling Democratic Party lawmakers.
Lawmakers from the ruling Democratic Party welcomed Lee's decision to revisit the measures.
Rep. Lee Eon-ju said the government should uphold its original commitment to encourage long-term investment through ISA accounts, adding that she welcomed the president's decision to review the proposals.
Rep. Lee So-young said she would revise the stock-price measure in line with Lee's directive.
The main opposition People Power Party said the review highlighted shortcomings in the government's policymaking process.
"If there had not been strong public opposition, the government would have proceeded with the plan as it was," party spokesperson Park Sung-hoon said, adding that the administration had failed to adequately assess the potential impact of the proposals before announcing them.
People Power Party lawmaker Ahn Cheol-soo also called for restoring the current ISA carryover provision and contract period, saying officials responsible for the proposed changes should be held accountable.
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