S. Korea vows tax incentives for corporate shareholder returns

SEOUL, Finance Minister Choi Sang-mok said Tuesday the government will reduce corporate taxes for companies that raise shareholder returns in an effort to encourage their valuation improvement measures and to address the "Korea discount" phenomenon. Choi made the remarks during a meeting with experts to discuss how to advance the country's capital market and to attract more foreign investors. Last month, the government announced the "corporate value-up program" that calls for prioritizing shareholder returns through tax benefits and other incentives, and encouraging listed companies to voluntarily present measures to improve their valuation. "The government will ease the burden of corporate taxes for companies' certain proportion of an increase in shareholder return," Choi said. "Shareholders of companies that raise dividend payouts will enjoy a greater reduction in income tax," the minister said, noting that details will be fixed after reflecting various opinions from experts and researches. The Korea discount refers to South Korean companies having lower valuations than their global peers due to low dividend payouts, geopolitical woes and other market features, such as market dominance by large conglomerates. Source: Yonhap News Agency