South Korean ruling party pledges 2-year delay for crypto tax as elections loom
The People Power Party — South Korea’s ruling party — has started a push to delay crypto gains taxes for another two years as part of its campaign promises for the upcoming general election in April.
Local media outlet the Herald Business Daily reported that the political party shared its stance that creating a general framework for crypto is a must before diving into taxation. The party believes that taxing crypto should only be possible once this base framework has been established.
A representative from the party also highlighted that the tax base has not yet been established. Unlike the stock exchange, the official explained that no entities are mandated to oversee crypto transactions. The party believes two years is necessary to establish such a system. The ruling party official also said that taxation should protect the country’s property and the lives of its citizens, stating that some aspects of the government have neglected the crypto market so far.
The plan to tax crypto trading profits was announced back in January 2021. With the taxation rules, crypto investors who record gains exceeding 2.5 million won (around $1,900) in one year would be required to pay a 20% tax. The set threshold is significantly lower than that of stocks, where only over 50 million won (around $37,400) in gains will be taxed.
Related: South Korean crypto exchanges reported 50% more suspicious transactions in 2023
The implementation of the tax has faced several delays over the years. Initially, the plan was to implement the tax in 2022. However, lawmakers reached an agreement to delay the tax implementation until 2023, citing flaws in the information-gathering procedures that would be carried out by the National Tax Service.
In July 2022, government officials announced they were postponing the 20% crypto gains tax implementation again by two years. This time, the lawmakers cited the stagnant market conditions within the crypto space. At the time, Bitcoin (BTC) was trading at around $20,000 and went on to hit a low of $16,000. The government also said that it needed time to prepare investor protection measures.
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