The government has decided to scrap the income tax on financial investments while reducing the securities transaction tax as part of efforts to help people’s efforts in building assets.

The Financial Services Commission(FSC) disclosed the decisions on Wednesday during an open forum chaired by President Yoon Suk Yeol on people’s livelihood.

This comes after the president vowed in his New Year's address to overcome the so-called "Korea discount" afflicting local stocks with lower values or higher risk premiums compared to global assets by streamlining red tape in the capital market.

Initially, the government was set to reintroduce the income tax on financial investments in 2025 to impose a tax rate of 20 percent on investors whose capital gains exceeded certain amounts following investment in financial products, including stocks, bonds, funds and derivatives.

As for the securities transaction tax, the government will reduce it as it had initially planned. As a result, the tax rate is set to be reduced from zero-point-20 percent to zero-point-18 this year and zero-point-15 percent next year.