Lee signals no change in capital gains tax, raises inheritance tax deduction cap

President Lee signaled in a press conference Thursday that he will maintain the threshold for major stockholders subject to paying capital gains tax at the current 5 billion won ($3.6 million), rather than lowering it to the proposed 1 billion won.

President Lee Jae Myung, left, speaks during a press conference to mark 100 days in office at the Blue House’s Yeongbingwan state guest house in central Seoul on Sept. 11. [JOINT PRESS CORPS]

President Lee Jae Myung signaled in a press conference on Thursday that he will maintain the threshold for major stockholders subject to paying capital gains tax at the current 5 billion won ($3.6 million), rather than lowering it to the government's proposed 1 billion won.

Lee said that if revising the capital gains taxes on stock investments, a move protested by many Korean investors, came at the cost of "inflicting damage to the stock market," lowering the threshold would "not be necessary," as he took questions from reporters in a live-broadcast press conference to mark his first 100 days in office.

Lee also ordered an increase in the inheritance tax deduction cap, which has been frozen for the past 28 years.

Currently, Korea reduces the inheritance tax burden by exempting a portion of inherited assets, with a flat deduction of 500 million won and an additional 500 million won deduction for a surviving spouse. The tax rate varies for assets exceeding 1 billion won.

Lee has advocated increasing the flat deduction from 500 million won to 800 million won and the spousal deduction from 500 million won to 1 billion won. He has proposed a deduction cap of 1.8 billion won, a campaign pledge and also reflecting a bill to revise the inheritance tax law.

"It's cruel for families to have to sell and move out of their homes because they can't afford the inheritance tax after the death of a family member," Lee said. He said that the intent is to allow those who inherit a home to continue living there, provided it doesn't exceed the average apartment price in Seoul.

The changes could take effect as early as next year, as Lee urged swift legislative action.

Responding to the business community's criticism of the revised Commercial Act aimed at better protecting minority shareholders, Lee said, "It's not about squeezing corporations, but rather about pressuring some unscrupulous corporate executives." He emphasized the law is to "truly protect shareholders, contribute to the national economy and encourage a direction in which corporate management fosters the growth of the corporations themselves."

The latest revision to the Commercial Act requires the adoption of a cumulative voting system at listed companies with assets exceeding 2 trillion won.

President Lee Jae Myung speaks at a press conference to mark 100 days in office at the Blue House’s Yeongbingwan state guest house in central Seoul on Sept. 11. [JOINT PRESS CORPS]

The press conference, themed "100 Days for Recovery, Growth for the Future," began at 10 a.m. and lasted 150 minutes, longer than the initially allotted 90 minutes.

Lee gave a five-minute opening remark, stressing his commitment to economic growth and reflecting on his first 100 days in office, which followed a snap election after the ouster of his predecessor, former President Yoon Suk Yeol, over his Dec. 3 martial law imposition. This was followed by a question-and-answer session divided into three areas — people's livelihood and the economy; politics, diplomacy and security; and society and culture.

Lee addressed a variety of topics, including cooperation between the ruling and opposition parties, fiscal policy, real estate policy, prosecutorial reform and misinformation in the media.

Ahead of the conference, the presidential press corps drew up two prepared questions for each category. At the beginning of each section, Lee was asked to pick blindly between "A and B" to answer the presidential corps prepared joint questions in a game show format.

Deputy Spokesperson Jeon Eun-soo reads out a prepared question from the presidential press corps about people's livelihood and the economy at the Blue House’s Yeongbingwan state guest house in central Seoul on Sept. 11. [JOINT PRESS CORPS]

In a similar format to his first formal press conference marking 30 days in office, Lee again opted for a "lucky draw" process, selecting random business cards from boxes separated by categories to pick reporters to take questions from. Lee and his spokesperson, who moderated the questions, also randomly picked from some 150 journalists. The president took a total of 22 questions, including from foreign correspondents.

Like in his first press conference, Lee at times joked with reporters, while other times spoke on his personal qualms with the media, including attacks against his son.

"My son was working a normal job, but someone falsely reported he got a job at Hwacheon Daeyu, and now he can't find employment," Lee said, referring to an asset management company related to a land development scandal during his time as Seongnam mayor.

Lee, in turn, dismissed concerns that a special counsel investigating the martial law instigation proposed by his ruling Democratic Party (DP) is unconstitutional.

While discussing prosecution reform, Lee said, "I'm the biggest victim of the prosecution," in a nod to the five suspended criminal trials against him.

Lee wore the same white necktie with blue stripes to the press conference as he did at his people's appointment ceremony last month, to convey that he remains as intent on achieving his goals as he was when he first took office, the presidential office said.

BY SARAH KIM [kim.sarah@joongang.co.kr]