PANews, June 23 – According to Yonhap News Agency, lawmakers from South Korea’s ruling camp and multiple labor and civic 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. Scholars at the meeting noted that taxing only upon asset sales leads taxpayers to delay transactions, creating a “lock-in effect” that hinders the flow of capital to more efficient sectors. 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 accrued; maintaining taxation upon realization for real estate and unlisted equities 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, said that speculative overheating in single-stock leveraged ETFs for Samsung Electronics and SK Hynix has already produced policy side effects. He admitted that he should have more strongly blocked the launch of such products in the first place, and warned that high-leverage trading and margin stock buying (“borrowing money to speculate in stocks”) could amplify market volatility and harm retail investors.