National Assembly Unrealized Gains Tax Proposal Sparks Panic
A controversial proposal discussed in a South Korean National Assembly forum to tax unrealized capital gains (paper profits) on stocks and real estate has triggered a historic stock market crash. The proposal, backed by a coalition of progressive lawmakers and labor/civic groups, aimed to tax taxpayers’ actual economic capacity. However, opponents warned it would cause a severe lock-in effect, forcing investors to liquidate positions preemptively. This proposal follows the repeal of the Financial Investment Income Tax (FIIT) on realized gains in late 2024.
KOSPI Plummets 9.99% on ‘Black Tuesday’ Triggering Circuit Breakers
The market reaction was immediate and severe. On June 23, 2026, the benchmark KOSPI index plummeted 9.99% (-910.71 points) to close at 8,203.84, triggering automatic circuit breakers and trading halts. Technology giants Samsung Electronics and SK Hynix fell over 12%, leading a broad-based market sell-off as retail and institutional investors panicked over potential taxation on paper profits before assets are actually sold.
