How will government fine-tune controversial tax reform measures?

Korea is considering potential tweaks to its recently announced tax reform package, amid widespread public criticism and feedback, particularly concerning individual savings accounts (ISAs) which have faced strong disapproval from investors, according to government sources on Monday. However, for real estate taxes, the administration intends to maintain the core components of its proposal, such as the deduction framework and tax rates.

Additional modifications, including limits on comprehensive real estate tax increases, are anticipated to be deliberated within the parliamentary process. The government intends to solicit public opinion through Thursday prior to engaging in discussions at a Cabinet meeting, with the intention of presenting a finalized bill to the National Assembly early in the following month.

The revisions will primarily concentrate on ISAs, which provide tax breaks on interest and dividend income and have become a favored investment option for retail investors seeking to accumulate long-term wealth. The original plan introduced a novel "productive finance ISA" scheme while eliminating the annual contribution requirement.