South Korea will loosen rules on the capital gains tax for stock investors in an effort to prevent a possible year-end selling spree and the subsequent market chaos, the finance ministry said Thursday.

The country currently levies the tax on shareholders who own stocks worth more than 1 billion won ($766,812), but the government decided to raise the threshold to 5 billion won, according to the Ministry of Economy and Finance.

"The measure was in consideration of the recent capital market situation, where high interest rates persist and uncertainties at home and abroad have grown. It also aims to minimize year-end market volatility to be caused by investors' stock selling to avoid taxation," the ministry said in a release.

The ministry will revise the regulation within this year, which will come into force starting Jan. 1, 2024, following the Cabinet approval, it added. (Yonhap)