SEOUL, July 30 (Reuters) - South Korea will expand capital gains taxes to cover all stock price index options and futures transactions as part of changes to tax codes following an annual review, the finance ministry said on Monday.
The move, set to kick in from April, comes as Asia’s fourth-largest economy pushes to boost tax revenue to bolster fiscal spending in the face of a rapidly aging population.
The ministry said in a statement that it planned to levy a 10 percent tax on capital gains from trading of Kosdaq 150 futures contracts, Kosdaq 150 options and KRX 300 futures.
That marks an expansion from the limited number of stock derivatives, including Kospi 200 futures contracts and Kospi 200 options contracts, that currently are subject to such taxes.
“We’re trying to impose tougher taxes on capital gains, and are working towards fairer taxation. It makes sense to expand the (capital gains) levy to all stock options and futures,” a finance ministry official said.
Other changes adopted after this year’s review include an increase in subsidies for citizens with low incomes. Those with incomes below certain levels will receive up to 3 million won ($2,690) in annual subsidies, up from 2.5 million won currently.
That comes as President Moon Jae-in tries to narrow the gap between rich and poor in the country, where wages have failed to keep up with corporate earnings.
The revisions, which the finance ministry said would have the net result of reducing government revenue next year by 3.3 trillion won ($2.96 billion), will on Aug. 31 be submitted for parliamentary approval. Revisions to 19 tax codes will need to be approved, the ministry said.
$1 = 1,117.9000 won Reporting by Cynthia Kim Editing by Joseph Radford