(Bloomberg) -- South Korean President Yoon Suk Yeol pledged to scrap the planned capital gains tax on income from financial investments in a bid to boost investor sentiment and stock values.  

The equity markets are “significantly undervalued” even though the country boasts of companies with global competitiveness, Yoon said at an opening ceremony of the 2024 stock market Tuesday, according to his office. 

The president vowed to reform capital markets regulation during his term and said he will consider revising laws to improve returns for retail investors. The government in 2022 had agreed to delay by two years the introduction of the financial investment income tax in 2023. The pledge is the latest measure to boost the stock market. 

South Korea in November prohibited stock short-selling until June 2024, and in December eased the large shareholder threshold for capital gains tax. The relaxation was aimed at preventing major stockholders from selling shares at year-end to avoid tax.

After a two-year delay, South Korea had planned to levy at least 20% tax starting 2025 if annual capital gains from stock investments exceed 50 million won. Investors who earned more than 2.5 million won in other financial assets, too, will be required to pay the levy. 

South Korea’s benchmark Kospi index rose as much as 0.7% on the first trading day of 2024. 

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