Finance Minister Bahk Jae-wan said Tuesday that the government is cautious about the ruling party’s proposal to impose a new capital gains tax on profits from stock transactions, out of concern over potential negative impact on foreign investments in the local bourse.

The minister made the remark at a parliamentary meeting as the ruling party is pushing to revise the current taxation system to impose taxes on stock gains and increase taxes on the wealthy as part of efforts to woo voters unhappy with the growing income gap ahead of April’s general elections.

The government currently levies 10-30 percent taxes on stock trade profits from big investors who own over 10 billion won ($8.9 million), or 3 percent, of shares of a firm listed on the Korea Stock Exchange. The current law exempts private investors from the capital gain tax on stock gains, instead imposing small securities transaction fees.

“I am cautious about imposing a tax on capital gains from profits from stock investment,” Bahk said during a parliamentary committee meeting on finance. “The international financial market’s volatility is particularly high at this point in time.”

Bahk also remained opposed to the ruling party’s demand that he consider the matter seriously, saying forming a government task force to discuss the proposed tax could have an impact on the stock market.

Regarding increased tax on the superwealthy, proposed both by the ruling and opposition parties, Bahk said creating a new tax only increases the burden on those who faithfully fulfill their duties.

“It would be better to find out those who conceal their assets overseas or downsize their revenues and levy taxes on them to implement a fair taxation system,” Bahk said. (Yonhap News)