PANews, June 23 – According to Yonhap News, lawmakers from South Korea’s ruling camp and multiple labor and social groups have proposed including unrealized gains (paper profits) on assets such as stocks and real estate in the comprehensive income tax base. They advocate taxing based on actual economic capacity rather than at the point of sale, in order to narrow loopholes in capital gains taxation. Participating scholars noted that taxing only upon asset sales causes taxpayers to delay transactions, creating a “lock-in effect” that hinders the flow of capital to more efficient areas. The proposals include: in principle recognizing unrealized gains as income, but allowing the tax liability to be deferred until the asset is sold with interest charged; maintaining taxation upon realization for real estate and unlisted equity where market value is difficult to assess; or limiting the new system to high-net-worth individuals and specific financial assets, while strengthening the tax burden on high-income capital earners.

Separately, Lee Chan-jin, head of South Korea’s Financial Supervisory Service, stated that speculative overheating in single-stock leveraged ETFs for Samsung Electronics and SK Hynix has already produced policy side effects. He admitted that the launch of such products should have been blocked more forcefully from the outset, and warned that high-leverage trading and buying stocks on margin (“borrowing money to speculate in stocks”) could amplify market volatility and harm retail investors.