The South Korean government is ramping up discussions on specific tax incentives aimed at enhancing the market value of local companies, with plans to conduct public hearings over the next two months.

“We talked about tax incentives for the Value-up Program on several occasions. But now is the time for us to discuss more specific plans,” Finance Minister and Deputy Prime Minister Choi Sang-mok told reporters on Monday.

“Throughout June and July, we will host public hearings to deliberate specific tax incentives,” Choi said.

The government’s Corporate Value-up Program aims to incentivize listed firms to bolster their value, thereby improving their market value and addressing the so-called “Korea discount” issue. “Korea discount” refers to Korean companies being seen as comparatively undervalued due to various factors.

However, the recent release of a vague guideline lacking binding force and specific incentives to boost participation has drawn criticism.

READ: South Korea proposes tax cuts to stimulate corporate investment

Choi mentioned that the hearings will cover various incentives discussed in the market, including separate taxation of dividend income, corporate tax credits for increased dividends, and the abolition of inheritance tax surcharges for major shareholders.

“From the perspective of the effectiveness of incentives, the more benefits, the better. However, an excess could compromise fairness. We’ll strive to strike a balance,” he emphasized.

Public hearings

The top finance policymaker revealed that the open hearings will occur two to three times over the next two months. In the initial session, options will be refined, with subsequent discussions aimed at finalizing incentive details.

Choi also noted that discussions on inheritance tax will be included in the hearings. South Korea has the world’s second-highest inheritance tax rate at 50 percent, with a 20 percent “management premium” surcharge for major stakeholders at large firms, elevating the rate to the world’s highest, at 60 percent.

“In regard to the inheritance tax law, there are various proposals, from eliminating the surcharge for major shareholders to expanding family business inheritance deductions and enhancing benefits for Value-up companies,” he explained. “We will narrow down options through public hearings and incorporate them into the tax law amendment.”

READ: S. Korea readies financial support for small businesses, builders

Monday’s briefing marked Choi’s inaugural monthly press conference, a move aimed at enhancing communication with the media and the public.

During the session, he addressed various queries, including clarifying the government’s position on the short-selling ban.

“To reintroduce short selling, we need regulatory enhancements to combat illegal practices, including the implementation of a monitoring system,” he emphasized. “With the ban set to continue until June, we aim to clarify our resumption plans by the end of the month for market stability.

SME benefits extension

Earlier that day, Financial Supervisory Service Governor Lee Bok-hyun suggested that the short-selling monitoring system’s development could conclude in the first quarter of next year, suggesting a potential lift of the ban around that time.

Choi also disclosed the government’s plans to support the growth of small and medium-sized enterprises by extending the period for receiving benefits from three years to five years. Additional measures to assist them post-extension will also be introduced.

These measures will be unveiled in early June as part of the government’s “dynamic economy road map,” outlining its economic policy vision.

Regarding inflation, Choi reiterated the government’s positive outlook.

“Fortunately, prices are showing an overall downward trend after March’s peak,” according to Choi. “If there are no additional disruptions, we anticipate them stabilizing in the second half of the year as originally forecast, around the low to mid-2 percent range.”

Thousands of college graduates are entering adulthood and may need to start thinking more about money management.

Author, self-made millionaire, and host of the I Will Teach You to be Rich podcast Ramit Sethi revealed the ‘simple’ step for college graduates to be financially successful in the future.

According to NBC 10 Philadelphia, Sethi’s advice for college graduates to achieve financial success is ‘invest 10 percent’ of their salaries every year. 

‘At the end of the year, increase that by one percent. Do this for as long as you can and you will be a multimillionaire,’ he told CNBC Make It earlier this month.

Sethi, who also starred in the 2023 Netflix docuseries How to Get Rich, has years of professional experience and is the founder of IWT. 

Sethi, who starred in the 2023 Netflix docuseries How to Get Rich, is the founder and CEO of IWT – a website that hosts over one million readers a month

According to Sethi’s LinkedIn, his parents immigrated to the US in the 1970s from India.

‘With four kids and one income, they couldn’t afford to send me to college so I built a system to apply 60+ scholarships,’ he wrote in his profile description.

He went on to receive a full scholarship to Stanford University, where he earned bachelor’s and master’s degrees in 2004 and 2005. 

However, after graduation, he admitted that he took his first scholarship check, invested it in the stock market, and lost around half of it almost immediately.

This incident inspired him to learn about money and that what he learned during his schooling was ‘irrelevant.’

Today, he runs IWT – a website that hosts over one million readers a month that are interested in learning more about business, careers, negotiation, psychology, and money.

His 2009 New York Times Best Seller I Will Teach You To Be Rich is a six-week finance program for individuals between the ages of 20 to 35.

However, the steps he discussed with NBC 10 Philadelphia on how college graduates will be successful may be simpler for former students to understand.

Sethi’s 2009 New York Times Best Seller I Will Teach You To Be Rich is a six-week finance program for individuals between the ages of 20 to 35

The first thing a college graduate must do to get started is open their own brokerage account, traditional IRA, Roth IRA, or any other kind of investment account.

In order to do so, the college graduate must provide information such as a driver’s license and a social security number.

Once the account is open, the owner of it can begin depositing money and select what kinds of funds they would like to invest in.

NBC 10 Philadelphia also suggests that the account holder look into setting it up so that their investment account will receive automatic deposits.

The investment will continue to grow and work well for the college graduate that is looking to be financially successful.

Despite Sethi’s suggestion in investing 10 percent of a salary every year, college graduates may not have to start doing that right away. 

It’s best for college graduates to begin investing early on so that their money will have longer time to grow through compound interest.

According to Fidelity, compound interest is when interest you earn in a savings or investment account earns interest of its own.

This means that the investment account holder can earn interest on its initial balance and the interest that is added to the total amount of money over time.

An example of this would be if a college graduate was to invest $1,000 and earn an annualized return of 7 percent.

This would result in their investment growing to $1,070 by next year and earn 7 percent of their entire balance the year after that.

If college graduates were to begin contributing $100 toward an investment account that generates a 7 percent annual return rate when they’re 21-years-old, their total could be over $1.4 million by the time they’re 65.

‘By starting at your college graduation with your first job, you will set yourself up for a lifetime of living a rich life,’ said Sethi.