In response to ongoing controversy surrounding the 2026 tax reform plan announced last week, the government has begun reviewing proposals for the Individual Savings Account (ISA) and the stock price manipulation prevention law.
According to Yonhap News on the 9th, the Ministry of Finance has initiated a review of certain legislative proposals based on feedback received since the announcement of the tax reform plan, as well as comments from President Lee Jae-myung and political circles.
The previously announced reform plan included the elimination of the ISA limit carryover and a reduction in contract periods. Additionally, concerns have been raised that the introduction of a new productive finance ISA, which allows investment only within the country, has narrowed the options for existing ISA holders.
The government also plans to reassess the stock price manipulation prevention law. The original intent of this proposal was to impose taxes on stock values that are artificially lowered to reduce inheritance and gift taxes, setting a minimum valuation increase of 30% in such cases.
Criteria for stock price manipulation included companies with a price-to-book ratio (PBR) in the bottom 25% of KOSPI sectors or the bottom 10% of KOSDAQ over the past six years.
Lawmakers have expressed concerns that companies might exploit loopholes to manage their PBR rankings during specific periods.
President Lee Jae-myung reportedly directed a comprehensive review of the ISA reform plan and the stock price manipulation prevention law during a situation assessment meeting on the 7th.
Voices from various sectors are also rising regarding the real estate tax reform plan. According to the National Assembly's Legislative Research Service, over 4,000 legislative opinions have been submitted as of 5 p.m. on the 9th regarding amendments to the comprehensive real estate tax law and the income tax law.
The existing reform plan includes a tax rate based on the assessed value of housing and proposes calculating capital gains tax on housing sales using the actual residence period rather than the holding period for the long-term holding special deduction.
There are ongoing calls for broader recognition of cases where individuals cannot meet the actual residence requirement, particularly for those living away from home due to family care responsibilities, such as childcare. Additionally, there are suggestions that periods of residence during long-term remodeling projects should be partially recognized.
The deadline for the legislative notice of the government's tax reform plan is set for the 20th, with discussions scheduled for a vice-ministerial meeting on the 27th and a cabinet meeting on the 1st of next month, aiming for submission to the regular National Assembly before September 3.
* This article has been translated by AI.
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