The government will restore the maximum corporate tax rate to 25 percent next year, reversing the Yoon Suk Yeol administration’s one percentage point cut, while separately levying taxes on dividend income.

The finance ministry approved such tax reforms on Thursday, during a session of its review committee presided over by First Vice Minister Lee Hyoung-il.

Returning to 2022 taxation levels in a bid to increase the government's tax revenue, the ministry will raise the rate in each bracket by one percentage point to range between ten and 25 percent.

The vice minister stressed that the reforms are a part of "normalizing" the tax system after the Yoon government's attempt to vitalize the economy through tax cuts were deemed ineffective.

The government will also restore the securities transaction tax to the 2023 rate of zero-point-two percent, and redefine a major shareholder when calculating the transfer income tax on sales of listed shares, bringing the criterion back down from five billion won, or around three-point-six million U.S. dollars, per stock item to one billion won.

It will also implement President Lee Jae Myung's election pledge to separate taxes from financial income on dividend income for high-dividend companies as part of efforts to vitalize the capital market.

Under the current law, if the financial income exceeds the threshold of 20 million won per year, it would be subject to the comprehensive financial income taxation with an accumulated rate of up to 49-point-five percent.
 
The government projected the reforms to generate an additional tax revenue of around eight trillion won each year.