About us
(Seoul=Yonhap Infomax) Nam Kyoung Hwang – Lee So-young, a lawmaker from the Democratic Party of Korea, stressed the importance of advancing the implementation of separate taxation on dividend income by one year, calling for the criteria to be based on dividends from companies with April 2026 fiscal year-ends, rather than the government’s proposed timeline.
On the 24th, Lee wrote on Facebook, “For the first time, the National Assembly’s Strategy and Finance Committee’s Tax Subcommittee will discuss the issue of separate taxation for dividend income today.”
Lee argued, “Under the government’s proposal, even companies that have made no effort to increase dividends could benefit from the separate taxation scheme. This oversight must be corrected to ensure the policy effectively incentivizes higher dividend payouts.”
She added, “It is rare for major tax laws to be decided after a single discussion in the subcommittee. Other key bills, such as the Corporate Tax Act, have also been deferred for further review. Since tax law is determined by the National Assembly, not the government, I will do my utmost to present my case so that the subcommittee members can make a rational decision.”
The National Assembly’s Strategy and Finance Committee convened its Tax Subcommittee on the morning of the 24th to continue deliberations on next year’s tax reform proposals.
The government previously submitted a plan to allow separate taxation on dividend income received from high-dividend companies, lowering the tax rate to 35%.
Eligible companies are those with a dividend payout ratio of at least 40%, or at least 25% with a year-on-year increase of 5% or more compared to the three-year average.
However, amid criticism that the maximum 35% tax rate does not sufficiently incentivize higher dividend payouts, the government and ruling party are now considering lowering the top rate to 25%.
The opposition People Power Party has expressed disagreement with the government’s criteria for high-dividend companies, but supports the principle of separate taxation for dividend income, raising the possibility of bipartisan agreement.
nkhwang@yna.co.kr
(End)
Copyright © Yonhap Infomax Unauthorized reproduction and redistribution prohibited.