Will South Korea delay bill dealing with tax on crypto gains
Crypto traction within South Korea has seen a significant surge in recent times. Regulators have taken significant steps to make sure the space is well regulated. From cracking down on “unlicensed” platforms to implementing a tax on crypto gains, South Korea tops the chart.
South Korea’s crypto tax regime that will see the imposition of a 20% tax on cryptocurrency gains above 2.5 million Korean won ($2,100) will come into effect in 2022.
However, there has been an update in the matter.
THE PEOPLE POWER PARTY OF SOUTH KOREA IS PROPOSING A FURTHER DELAY AND ADJUSTMENT OF THE PLANNED TAX RATE ON CRYPTO PROFITS.
— BreakingCrypto (@BreakingCrypto5) October 11, 2021
According to The Korea Herald, opposition lawmakers are ‘trying to push back controversial taxation on income from investing in cryptocurrencies.’
“The People Power Party’s bill suggests a one-year delay for crypto gain taxation to 2023 along with a more generous tax redemption than currently planned.”
As per their suggestion,
“The lawmakers plan to revise the current law to impose a 20% tax rate for profits between 50-300 million won ($42,000-$251,000) and 25 percent for profits above 300 million won. This is in line with the Financial Investment Income Tax, which is to be implemented starting from 2023.”
Cho Myoung-hee, a representative of the People Power Party commented on the same. Even highlighted the motive behind this move. He opined,
“It is not right to impose taxes first at a time when the legal definition of virtual currency is ambiguous. The intention is to ease the tax base to the level of financial investment income tax so that virtual currency investors do not suffer disadvantages.”
The said party is expected to submit the proposed bill as early as tomorrow, the report noted. Although, no further details were mentioned. Nevertheless, the government remains undeterred from its stance. For instance, Finance Minister Hong Nam-ki downplayed the possibility of delaying taxation during a parliamentary hearing. “It is difficult to delay taxation on virtual assets in terms of policy reliability and legal stability,” he added.
This certainly wasn’t the first time the proposed move faced some backlash from the community. Earlier, Noh Woong-rae, a member of the ruling Democratic Party, had stated that the country needs to defer the taxation plans until a sufficiently prepared infrastructure is in place.
It’s important to consider that this crypto tax regime is one of many strict regulations enacted by the government in recent times. This could shape the country’s cryptocurrency market moving forward.
This article was first written on yusmid.com