Tension Rises Over Tax Reforms Excluding Funds: KOFIA's Proposal
The Korea Financial Investment Association (KOFIA) has expressed dissatisfaction over recent tax reforms announced by the government, which exclude funds from receiving favorable tax treatment. The association has proposed that dividend income from funds, including exchange-traded funds (ETFs) and mutual funds, be subject to separate taxation, similar to the advantages currently enjoyed by stock investors. Stock dividends currently enjoy separate taxation that does not cumulate with other income, allowing maximum tax rates to potentially drop by up to 10 percentage points.
KOFIA has highlighted the issue of ETFs and mutual funds being excluded from this tax benefit, asserting that this could diminish their attractiveness and potentially harm the investment environment in the long run. The government plans to scrutinize opinions from various stakeholders to decide whether to incorporate KOFIA's proposals into the revised tax legislation. This issue is likely to become a point of contention between the government and the financial investment industry.
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