S. Korea considers plan to cut stock transaction tax

South Korea could include its move to lower the transactions tax rate in its stock market stimulus measures expected to be unveiled this month, government and industry sources said Friday.

   Earlier, Shin Je-yoon, head of the Financial Services Commission (FSC), confirmed that he is to announce stock market stimulus measures "within October," calling for cooperation from the National Assembly to pass related bills going forward.

   The FSC has already drawn up its draft measures, which are not under consultations by related agencies and ministries, the sources said.

   "They will be comprehensive measures that help expand both demand and supply bases in the stock market," a high-ranking government official said on condition of anonymity.

   Sources said that the government could include in those measures its push to cut the stock transaction tax rate that currently stays at 0.3 percent of investment.

   Some argue that the rate is so high that it has hurt investor sentiment and put a damper on overall market transactions.

   Opinions are divided over the tax issue, with market experts arguing that a tax cut could result in more transactions and eventually more tax revenue. The finance ministry worries that it could only end up shrinking revenue and sparking controversy that the government helps the wealthy.

   The move comes as transactions in local stock markets have been slowing markedly in recent years.

   Industry data showed that daily transactions in the benchmark KOSPI and tech-savvy KOSDAQ here fell to 5.8 trillion won last year after peaking at 9.1 trillion won in 2011. (Yonhap)