‘Three Foreign Exchange Stabilization Tax Bills’ Pushed Back by Political Wrangling, Now Expected to Pass on 31st

The ruling and opposition parties have been so absorbed in partisan strife that they have paid little attention to responding to the surge in oil prices triggered by the war involving Iran. As they focused on disputes over prosecutorial reform bills, including legislation to establish a Public Prosecution Office, they postponed handling the Three Foreign Exchange Stabilization Tax Bills until the 31st.
From the 19th to the 22nd, the National Assembly of the Republic of Korea held a four-day full Senate session, during which it passed bills to establish the Public Prosecution Office and the Serious Crime Investigation Agency and adopted a plan for a Parliamentary Inquiry into Alleged Fabricated Prosecution. The Democratic Party of Korea and other pro-government forces pushed these measures through, while the People Power Party (PPP) mounted a filibuster—an unlimited debate allowed under parliamentary rules to block proceedings—in protest.
In this process, the Three Foreign Exchange Stabilization Tax Bills, which had originally been scheduled for the full Senate session on the 19th, were pushed back to the session on the 31st. The bills were designed to cushion the shock from soaring oil prices originating in the Middle East and had already been agreed upon by the ruling and opposition parties in the Strategy and Finance Committee of the National Assembly of the Republic of Korea, yet they were sidelined by the political battle over prosecutorial reform.
The Three Foreign Exchange Stabilization Tax Bills are amendments to the Restriction of Special Taxation Act. They include measures such as: granting individual investors a capital gains tax deduction of up to 100% when they sell overseas stocks and reinvest in domestic stocks through a domestic market return account (RIA); reducing capital gains tax on overseas stock investments when individuals use foreign exchange hedging derivatives to hedge against exchange rate fluctuations; and raising the non-taxable portion of dividend income from overseas subsidiaries from 95% to 100% to encourage the repatriation of funds to Korea.
The Democratic Party of Korea plans to use the full Senate session on the 31st to pass the Three Foreign Exchange Stabilization Tax Bills along with other livelihood-related bills whose processing has been delayed by political wrangling. The PPP is also expected to cooperate. Contentious bills have already moved beyond the National Assembly of the Republic of Korea’s direct control, and with local elections scheduled for June, neither side can afford to be seen as obstructing measures that affect people’s livelihoods.
uknow@fnnews.com Kim Yun-ho Reporter