Opposition Says FII Tax Will Be Revived After Local Elections

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[The Financial News] Song Eon-seok, floor leader of the People Power Party, said on the 28th that "the reality people will face after the June 3 local elections is nothing less than a tax bomb," adding that "the Tax Reform Proposal the government has announced for July is effectively a red alert for a tax bomb." He raised concerns that the Lee Jae-myung administration could raise real estate holding taxes and revive the Financial Investment Income Tax (FII Tax) immediately after the local elections. The FII Tax was abolished in 2024 through a bipartisan agreement.
At a floor leadership strategy meeting held at the National Assembly that day, Song said, "President Lee Jae Myung and the government are continuing risky experiments with the public and the market over sensitive tax policies."
Song noted that "as part of the tax bomb that will be launched in earnest after the June 3 local elections, concerns are spreading that the Lee Jae-myung administration will abruptly revive the FII Tax." He interpreted Lee Jae Myung's remarks at the National Economic Advisory Council on the 9th, where he pointed out problems with the taxation system for the Securities Transaction Tax, as a sign of the FII Tax's return. At the time, Lee said, "The transaction tax is problematic because it is paid whether you make a loss or a profit," adding, "It is regressive because even people who do not earn money still have to pay it, so at some point we will need to replace the transaction tax and the Capital Gains Tax at the same level."
In response, Song said, "The FII Tax was abolished through a bipartisan agreement in 2024, and Lee Jae Myung, then party leader, also supported its abolition. To suggest reversing such a system in just over a year undermines policy consistency and public trust in the government."
He also criticized real estate policy, saying, "During the presidential campaign, they promised not to control housing prices through taxes, but instead they proposed strengthening the real estate holding tax and abolishing the long-term holding special deduction."
Song stressed that "in the market, fear is growing over an all-out increase in the tax burden, not only from visible hikes in the Officially Assessed Reference Land Price and tax rates, but also from invisible cuts in deductions," adding that "the Tax Reform Proposal the government announced for July is effectively a red alert for a tax bomb."
He also said, "Taxes are the strongest policy signal sent to the market," and added, "President Lee Jae Myung must not experiment with the public and the market through light SNS politics. I strongly urge him to immediately stop all attempts that are fueling fears of a tax bomb."
haeram@fnnews.com Lee Hae-ram Reporter