South Korean opposition leader agrees to scrap financial investment tax

South Korea's main opposition Democratic Party leader Lee Jae-myung on Monday agreed to back government plans to scrap a scheme to tax profits on financial investments, citing the need to boost the country's undervalued stock market.

Lee said he supported the government and ruling People Power Party's push to scrap the financial investment income tax, adding that South Korea's stock market was suffering "structural vulnerability" and facing a downward trend unlike others.

"I could not avoid considering the position of 15 million stock investors leaning on the stock market," Lee said during a party meeting, while acknowledging a need to tax profits from financial investments such as stocks and bonds and boost market transparency.

The decision comes after the People Power Party had been urging the Democratic Party, which has a majority in parliament, to support its plan to scrap the tax that was originally due to take effect last year but was delayed by two years until 2025.

Under the tax scheme, capital gains of more than 50 million won ($36,485) from stock investments would be subject to a 20 percent tax, while profits over 300 million won would be subject to a 25 percent tax.