Seoul: The finance ministry has unveiled a new package of tax benefits aimed at encouraging retail investors to reinvest in domestic markets. This initiative is part of broader efforts to stabilize the Korean won, which is nearing its weakest level against the U.S. dollar in 16 years.

According to Yonhap News Agency, the ministry's plan includes temporary tax relief on capital gains for individual investors who sell overseas stocks and reinvest the proceeds into domestic equities. This relief will be available for a one-year period, with the specifics of the program to be finalized after further review. The ministry emphasized that the tax relief will vary depending on the timing of the reinvestment.

Additionally, the government plans to assist major brokerage firms in launching forward-selling products to help retail investors manage foreign exchange risks. To further support domestic investment, the dividend income exclusion ratio for domestic parent companies receiving dividends from overseas subsidiaries will be increased from 95 percent to 100 percent.

The finance ministry highlighted the strong performance of the domestic stock market, noting that the Korea Composite Stock Price Index (KOSPI) has surged approximately 70 percent this year. However, there is a noticeable decline in domestic equity investments as individual investors increasingly favor overseas stocks.

The ministry pointed out the growing demand for repatriating overseas assets held by exporters and other companies, with the aim of boosting domestic employment and investment. It also reiterated its stance against an excessively weak Korean won, signaling the government's intention to introduce comprehensive policy measures to stabilize the local currency.