Hyungil Lee: "Leverage ETF Controversy Has Increased Volatility Contrary to Its Purpose"

"Strategic Sovereign Wealth Fund Will Be Expanded Based on Performance"

Hyungil Lee, the Deputy Prime Minister and Ministerial Nominee for Finance and Economy, stated at the National Assembly that he plans to engage in in-depth discussions regarding the scope of "inevitable reasons" for recognizing non-resident periods as resident periods, and will operate flexibly based on case examples when necessary.

Hyungil Lee, Deputy Prime Minister and Ministerial Nominee for Finance and Economy, is responding to lawmakers' questions at the confirmation hearing held at the National Assembly on the 15th. Photo by Dongju Yoon

At the confirmation hearing of the Planning and Finance Committee of the National Assembly on the 15th, candidate Lee said, "We will discuss this at the National Assembly, just like with the current tax law."

Revising the scope of "inevitable reasons" is an amendment to an enforcement decree, which does not require a resolution by the National Assembly. However, this statement is interpreted as an intent to broadly gather opinions at the National Assembly and reflect them in the policy.

Previously, last month, the government announced a revision to the tax law that would recognize periods of non-residency due to inevitable reasons as residency periods. The enumerated reasons included schooling, job changes or transfers, illness, school transfers, overseas stays, and caring for parents.

However, some pointed out that it is necessary to recognize a wider range of cases beyond the listed examples.

Regarding the purpose of this real estate tax reform bill, Lee explained, "It was designed with three goals in mind: to establish a residency-centered housing market, to ensure fair and equitable taxation, and to create a sustainable tax system."

Regarding the estimated increase in tax revenue the government expects from this tax reform, Lee responded, "I understand it will be about 3.4 trillion won over five years."

On the controversy surrounding single-stock leveraged exchange-traded funds (ETFs), Lee said, "Contrary to the initial intention, overall market volatility increased as it coincided with the semiconductor market," adding, "I apologize to the public."

When Assemblyman Taenyon Kim of the Democratic Party pointed out that "the scale of the strategic sovereign wealth fund will likely be at most 1 trillion won, or 2 trillion won at the maximum, which is too small, so the Future Response Fund should further expand it," Lee replied, "It may seem small initially, but we plan to expand it as we demonstrate operational performance."

When Assemblyman Houdok Yoon of the Democratic Party pointed out that "the interest profits accumulated by the financial sector during an era of rising interest rates should be returned to society," Lee responded, "Banks are an industry and must remain sustainable," adding, "Within that, it is necessary to expand inclusive finance to support the limits faced by vulnerable borrowers."

This content was produced with the assistance of AI translation services.