The Democratic Party is expressing internal dissent regarding the government's tax reform plan aimed at preventing stock price manipulation, arguing that the proposed measures lack effectiveness. Meanwhile, the People Power Party continues its criticism of the government's tax reform proposal.
On August 5, Democratic Party lawmaker Lee Hoon-ki held a press conference at the National Assembly to call for a comprehensive review of the Ministry of Finance's stock price protection law. He stated, "It is difficult to view this as an effective measure to prevent stock price manipulation." The stock price protection law aims to correct the practice of major shareholders keeping stock prices low to reduce tax burdens ahead of management succession.
Lee urged the Ministry of Finance to move away from a selective post-review approach and to base taxation on the actual value of companies rather than their past stock prices or rankings within their industry. He called for a complete re-evaluation of the tax reform plan that presents criteria for avoiding stock price manipulation.
He explained that his proposed legislation clarifies evaluation criteria in law and includes provisions for exceptions for companies in financial distress, adding safeguards against circumvention through subsidiaries. The bill includes measures such as: clarifying the evaluation floor as 'net asset value under tax law'; recognizing exceptions for genuinely distressed companies; gradual application to listed subsidiaries; abolishing the 20% premium evaluation for both listed and unlisted companies; and allowing major shareholders to pay taxes with listed stocks.
Lee also noted that he is continuing the legislative intent of Democratic Party lawmaker Lee So-young, who was the first to propose the stock price protection law in the National Assembly, stating that taxation should be based on the objective value of companies while addressing excessive burdens and liquidity issues for taxpayers.
On the previous day, Lee So-young criticized the Ministry of Finance's proposal, stating, "This government plan not only treats the National Assembly like fools but also betrays President Lee Jae-myung's sincere work directives."
Earlier, the Ministry of Finance announced that it would estimate stocks of companies suspected of stock price manipulation based on criteria such as being in the bottom 25% (KOSPI) or 10% (KOSDAQ) of the price-to-book ratio (PBR) over 12 half-year periods, or if there have been actions negatively impacting company value, such as repeated listings or convertible bond issuances, or if the market value has dropped by more than 30% over the past three years.
Meanwhile, the People Power Party continued its offensive regarding the tax reform plan. Spokesperson Park Chung-kwon criticized the proposal, stating, "The tax obsession that drove the entire nation into a real estate hell during the Moon Jae-in administration has resurfaced in an even harsher form under this government." He specifically called for an immediate halt to what he described as a sadistic tax experiment that exploits the suffering of the people and urged a complete review of punitive tax measures threatening the housing stability of ordinary citizens.
* This article has been translated by AI.
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