SEOUL, March 21 (Reuters) - South Korea’s finance ministry and top market regulator said on Thursday they will cut the tax rate for stock trading this year in an effort to support domestic equity markets and startup firms.
Authorities will cut the trading tax for stocks listed in major KOSPI and junior KOSDAQ markets by 0.05 of a percentage point to 0.10 percent and 0.25 percent, respectively, while cutting the tax for KONEX market by 0.2 of a percentage point to 0.1 percent, a joint statement said.
However, authorities will maintain the special tax for rural development levied on KOSPI transactions at 0.15 percent, which would bring the combined tax on KOSPI transactions to 0.25 percent.
The KONEX stocks trading tax is expected to fall to 0.10 percent according to statement, while the tax for unlisted shares will drop to 0.45 percent.
The reforms on KOSPI, KOSDAQ and KONEX taxes do not require parliamentary approvals, while the revision on unlisted shares do, a finance ministry official told Reuters.
In November, Financial Services Commission Chairman Choi Jong-ku said the government needs to “seriously consider” repealing the stock transactions tax as it could help boost the domestic equity markets. (Reporting by Hayoung Choi; Editing by Sam Holmes)