Rep. Lee So-young of the Democratic Party of Korea, who proposed the Stock Price Suppression Prevention Act in May 2025, stated at a forum on the 21st that the bill addresses tax disparities between listed and unlisted companies in inheritance and gift scenarios. Lee explained the legislation originated from the August 2024 financial investment tax debate, when she observed that identical companies face different tax calculations depending on listing status—unlisted firms use fair value assessment while listed companies use market price. The proposed amendment to the Inheritance and Gift Tax Act aims to introduce supplementary valuation methods to address this inequity, which Lee argued has led controlling shareholders to suppress stock prices ahead of inheritance events.
Bill Addresses Tax Calculation Disparity Between Listed and Unlisted Companies
Speaking at the Legislative Tasks Forum on Stock Price Suppression Prevention Act held at the National Assembly on the 21st, Rep. Lee stated, "I thought it was unreasonable that the taxes paid differ solely based on whether a company is listed on the capital market." She explained that the bill reflects the recognition that supplementary valuation methods are needed to address unfairness in the current system.
Lee noted that during the financial investment tax debate in August 2024, she learned that "when the same company is unlisted, controlling shareholders pay taxes based on fair value assessment for succession, but when it becomes a listed company, taxes are calculated based on stock price." She added, "Because stock prices are often suppressed below a company's normal value in preparation for inheritance and gift events, I came to understand that stock investors expressed this problem through comments saying 'Please abolish the controlling shareholder inheritance tax.'"
The lawmaker emphasized, "I came to think that not only are there problems raised within the stock market, but the system itself has issues," pointing out the need to supplement the market price principle in tax calculation. She analyzed, "Management can boost stock prices or suppress them through negative decision-making depending on their judgment," indicating that the current tax imposition method requires improvement.
President Lee Jae-myung Expresses Support for Legislative Reform
Rep. Lee stated, "President Lee Jae-myung has also expressed sympathy with this problem awareness and mentioned the bill several times, so I understand the government is preparing a government bill with similar problem awareness." She added, "I expect the government bill to be well-prepared and submitted."
President Lee had previously remarked at an economic ministry briefing held at the Blue House on the 15th, "Things like the Stock Price Suppression Prevention Act that we talked about before still don't seem to be done," urging officials to "somehow obtain cooperation and speed things up."
Government Bill Expected by End of July
Rep. Lee stated, "When the government bill is released at the end of July, I think the market and media will pay a lot of attention to which bill better addresses the problem awareness." She emphasized, "I will do my best to ensure a good bill is ultimately passed by the National Assembly."
FAQ
What is the Stock Price Suppression Prevention Act proposed by Rep. Lee So-young?
The Stock Price Suppression Prevention Act, proposed in May 2025, is an amendment to the Inheritance and Gift Tax Act that addresses tax disparities between listed and unlisted companies. The bill introduces supplementary valuation methods beyond market price to prevent controlling shareholders from artificially suppressing stock prices before inheritance events.
When did President Lee Jae-myung express support for the Stock Price Suppression Prevention Act?
President Lee Jae-myung expressed support for the legislation on the 15th during an economic ministry briefing at the Blue House, urging officials to accelerate progress on the bill and obtain necessary cooperation for its passage.
