Seoul: South Korean President Yoon Suk Yeol has unveiled tax cuts for companies that increase capital returns to shareholders as part of the nation’s “Corporate Value Up Program.”
In anticipation of the government’s biannual economic policy announcement, Yoon outlined that these tax incentives will reward businesses that “actively expand dividends and implement low-rate separate taxation on shareholders’ dividend income,” according to a Google translation.
Yoon stated,“We will establish and spread the value-up program that increases corporate value and provides opportunities for asset formation to the people,” referring to the program initiated by the country's financial regulatory body aimed at revitalizing South Korea’s undervalued markets.
As per reports, South Korea’s market has long been undervalued due to factors such as opaque corporate governance and low dividend payouts, a phenomenon known as the “Korea Discount.” The Corporate Value Up Program seeks to address this by prioritizing shareholder returns through tax benefits and encouraging listed companies to voluntarily create and disclose valuation enhancement plans, as noted by the Financial Services Commission.
Additionally, in addition to these measures, President Yoon announced a 25 trillion won ($17.98 billion) support package for small businesses, acknowledging their continued challenging conditions.
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