SEOUL (Reuters) -South Korean President Lee Jae-myung said on Wednesday the government was preparing to revamp the country’s tax system to boost dividend payouts, as part of a broader push to make the domestic stock market more attractive.
“If it does not greatly hurt public finances, it will be better to lower (taxes) for more dividend income,” Lee said during a visit to the Korea Exchange.
Lee also ordered regulatory improvements to prevent unfair trading practices in the market and a “one-strike-out” system to penalize illegal trades, according to his spokesperson.
One of Lee’s major pledges during his election campaign was to implement various capital market reforms and resolve the so-called “Korea Discount”, a tendency for South Korean companies to trade at a lower valuation than global peers due to low dividend payouts and opaque corporate governance.
The day after Lee took office on June 4, his Democratic Party reintroduced legislation expanding the fiduciary duty of board members to protect shareholder interests and it plans to have the bill approved this month.
The country’s benchmark KOSPI stock index has rallied since Lee’s election victory last week on optimism around his “KOSPI 5,000” initiative aiming for the index to eventually reach 5,000 points. On Wednesday, it closed up 1.23% at 2,907.04, the highest level since January 14, 2022.
(Reporting by Hyunsu Yim and Jihoon Lee; Editing by Sonali Paul and Jamie Freed)
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