South Korea’s Moon Rejects Finance Minister’s Offer to Quit

(Bloomberg) -- South Korea’s President Moon Jae-in rejected an offer by the finance minister to step down in the wake of public backlash over plans to tighten tax rules for large shareholders.

Finance Minister Hong Nam-ki said in a parliament hearing Tuesday that the government is withdrawing the revision and that he had offered to resign to take responsibility for the months of chaos over the planned change. Moon rejected the offer and reaffirmed Hong in his job, according to a later text message from the presidential office.

The government had planned to impose capital gains tax on domestic individual investors who hold more than 300 million won ($264,000) worth of shares in a single company. That threshold will now stay at 1 billion won.

Hundreds-of-thousands of people had called for Hong’s dismissal on the presidential office’s petition website over concerns that the tax change would push stock prices down by causing company owners to sell to avoid the levy.

Hong’s offer to step down comes as South Korea’s economy shows growing signs of recovery from the pandemic slump. Recent gauges have mostly painted an upbeat picture, with consumer confidence jumping, manufacturing activity expanding, and exports improving.

Moon said earlier this week that the economy should be able to enter a “normal phase” in the first half of 2021 after recovering from the shock of the coronavirus.

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