President Lee Jae-myung has directed a review of the government's proposed reform of the Individual Savings Account (ISA) and the so-called stock price control prevention law, prompting mixed reactions from political parties. The ruling Democratic Party welcomed the move, stating it provided an opportunity to correct issues, while the opposition People Power Party criticized it as a hasty response to public opinion.
According to political sources on August 8, President Lee ordered a comprehensive reassessment of the ISA reform and the stock price control prevention law included in the recent tax reform proposal.
This directive comes amid growing criticism from investors and young people regarding the tax reform plan, interpreted as a call to reevaluate these policies from the ground up.
The controversial ISA reform plan involves eliminating the limit carryover system and shortening the contract period, leading to backlash primarily from young investors. The stock price control prevention law aims to prevent major shareholders from keeping stock prices low to reduce inheritance and gift taxes, but the government's proposal has been criticized for significantly narrowing its applicability compared to a version proposed by Democratic lawmakers, raising concerns about its effectiveness.
Within the Democratic Party, there are voices suggesting that the president's willingness to address market concerns should be viewed positively. Lawmaker Lee Eon-joo, who previously called for a review of the government proposal, expressed on Facebook, "We must uphold the original promise made to numerous retail investors to encourage long-term investment through ISA accounts," and welcomed the president's recognition of the issues and corrective measures.
Lawmaker Lee So-young also stated regarding the review of the stock price control prevention law, "We will correct this." Lawmaker Lee Hoon-ki announced that he and Lee So-young would work to ensure the passage of the stock price control prevention law in the National Assembly.
In contrast, the People Power Party argued that the president's directive revealed a failure in the government's policy verification process. They contended that the administration should have anticipated adverse effects before announcing the policies, rather than making adjustments only after public backlash intensified.
Park Seong-hoon, the party's chief spokesperson, remarked, "If there had not been strong public resistance, they would have pushed through the hasty reform plan as is. Ultimately, what has been revealed is that neither the president, the Blue House, nor the government properly assessed the implications and side effects of the policy before its announcement."
He added, "They failed to consider the shock of reducing ISA benefits, the impact of taxing non-resident single homeowners on the rental market, and the unintended consequences of the stock price control prevention system, leaving the public and the market in distress due to this amateurish behavior of 'announcing first, revising later.'"
Lawmaker Ahn Cheol-soo also stated on Facebook, "The carryover of ISA limits and the extension of the period must be restored to their original state, and those responsible for agreeing to the deterioration must also be replaced."
* This article has been translated by AI.
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