The South Korean government is positively considering bringing down the country’s stock trading tax, deputy prime minister and finance minister Hong Nam-ki said Wednesday.

“We agree to a certain point that the stock transaction tax is excessive,” Hong said. “The plan (to cut the tax) is under serious review and we plan to issue an official statement on the matter.”

The announcement comes two weeks after Lee Hae-chan, head of the ruling Democratic Party, convened a meeting with leaders from the financial sector and called for legislative reform of the country’s stock taxation system, saying “taxing investors on their losses is excessive.”

Korea currently levies a fixed tax rate of 0.3 percent on all stock transactions regardless of the profit or loss on the investment. This is a higher rate than that of its Asian peers including Singapore, Hong Kong and China. Most developed countries like the U.S., Germany and Japan tax only capital gains.

“Lowering the transaction tax could help reinvigorate stock activity,” said Hong.

Despite repeated demands from political and financial circles to lower or lift the stock trading tax, the finance ministry has been reluctant to tinker with one of its major sources of tax revenue. This is the first time the ministry has responded positively to the requests.

As of 2017, transaction tax generated 6.28 trillion won ($5.65 billion) to account for 2.4 percent of the government’s total revenue, with its importance hovering above 2 percent for the past three years. If lowered from 0.3 percent to 0.1 percent, the government’s tax revenue is expected to fall by 2.1 trillion won from the 2017 level.

Calls for a lower trading tax have gained more momentum in recent months as last year’s stock market slump left many investors badly bruised. This has prompted several representatives from the ruling party to introduce related bills.

The benchmark Kospi finished Thursday down 0.06 percent at 2,204.85.

By Sohn Il-seon and Kim Hyo-jin

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