Pedestrians walk under umbrellas at the Gwanghwamun Square in Seoul on July 31. This photo is not related to the story. (Yonhap) Individual savings accounts and related tax policy have become another point of contention following a government proposal to reexamine their tax status. President Lee Jae Myung quickly followed the proposal with orders to review the plans. Criticisms mounted as the proposed change could defeat the purpose of the accounts: easing tax burdens for investors — effectively for life — and encouraging long-term investment in stocks, bonds and equities.The ruling Democratic Party of Korea recently hinted at the change during a press conference held Sunday."We've been discussing ways to leave the (tax policy changes in) ISA untouched," said Rep. Han Jeoung-ae, policy chief of the ruling Democratic Party of Korea.Her remarks came days after President Lee Jae Myung reportedly ordered the budget authorities in a closed-door meeting Friday to review the proposed change from scratch, reprimanding his secretaries for failing to prepare properly.Introduced to South Korea in 2016, the government-backed ISA program drew over 8 million users as of February, according to the Korea Financial Investment Association.The investment limit for each account is set at 100 million won ($70,800) in South Korea.Taxes on income from dividends and interest are exempt for ISA holders in South Korea until the account is closed and if their financial income does not exceed 2 million won. Under extraordinary circumstances for lower-income groups, a 4 million won limit is applied. For gains beyond that limit, a 9.9 percent taxation rate will be applied, which is lower than the 15.4 percent rate under ordinary circumstances.The tax exemption on income from dividends and interest is applied for life once the ISA has been held for at least three years.But the recent proposal suggested that, starting next year, ISA closure could not be deferred indefinitely. Instead, ISAs would be capped at five years, meaning ISA holders would pay due taxes, close their account after reaching the five-year limit, then open a new account.Moreover, up to 20 million won in ISA installments is subject to tax benefits each year, and these benefits still applied to belated deposits. The proposed revision suggested that belated deposits will no longer be subject to tax benefits.Instead, the new proposal signaled the launch of a new type of ISA: No tax would be imposed on income from dividends and interest, while the account's lifetime would be 10 years and the investment limit is set at 200 million won.The new ISA, tentatively named "ISA for productive finance," cannot buy ETFs tracking foreign stock markets, as the target of its investment is limited to Korean stocks or funds tied to shares listed here.Han of the Democratic Party said the launch of the new type of ISA could be a matter of choice for the authorities. President Lee Jae Myung (Yonhap) The proposal earlier faced criticism from both sides of the aisle.Rep. Ahn Cheol-soo of the main opposition People Power Party has said the proposed change "ruthlessly slaughtered" the ISAs in South Korea, adding it deprived the young generation of their willingness to pursue lifetime investment and savings, and disrupted retirement plans of those in their 40s and 50s.The ruling party's Rep. Lee Un-ju also said in a Facebook post Thursday that depriving ISA holders of tax benefits "should not be pushed through," adding it would otherwise lose the public's trust toward parties concerned in the capital market here.The liberal lawmaker on Saturday said she welcomed the Lee Jae Myung administration's decision to review the proposal from scratch, adding the promise to the long-term investors must be kept.Changes concerning ISA holders were just some of the revisions brought under the spotlight.President Lee also reportedly ordered a review of a proposal to combat the malicious practice of a listed company's shareholders by Friday, saying the proposal "defeats the original purpose."Democratic Party Reps. Lee Hoon-ki and Lee So-young welcomed Lee's decision to review the policy, which they described as providing guidance for tax dodgers.Rep. Park Sung-hoon of the People Power Party on Saturday blasted the ruling bloc for failing to verify their own policies and making changes once they face public backlash from their announcements.“Without public backlash, these sloppy policies would have been pushed through,” Park noted.