The ruling party in South Korea, known as the People Power Party, has launched an initiative to postpone the implementation of taxes on cryptocurrency gains for an additional two years. This move is part of the party’s campaign promises leading up to the general election in April.
According to the local media outlet, the Herald Business Daily, the party has expressed its belief that establishing a comprehensive framework for cryptocurrencies is necessary before introducing taxation measures. The party argues that taxing crypto should only occur once this foundational framework is in place.
A representative from the ruling party emphasized that the tax base has not yet been established for cryptocurrencies. Unlike the stock exchange, there are no mandated entities that oversee crypto transactions. The party believes that a two-year period is required to establish a system to address this. The official from the ruling party also stated that taxation should safeguard the country’s assets and the well-being of its citizens, highlighting that certain aspects of the government have overlooked the crypto market thus far.
The plan to tax profits from crypto trading was initially announced in January 2021. Under the proposed taxation rules, crypto investors who earn gains exceeding 2.5 million won (approximately $1,900) in a year would be subject to a 20% tax. This threshold is significantly lower than that for stocks, where gains over 50 million won (around $37,400) are taxed.
The implementation of this tax has faced multiple delays over the years. Initially, the plan was to enforce the tax in 2022. However, lawmakers agreed to postpone it until 2023, citing flaws in the information-gathering procedures carried out by the National Tax Service.
In July 2022, government officials announced another two-year delay in implementing the 20% tax on crypto gains. This time, lawmakers pointed to the stagnant conditions in the crypto market as the reason for the delay. At the time, the price of Bitcoin (BTC) was around $20,000 and later dropped to a low of $16,000. The government also stated that it needed time to prepare measures to protect investors.
In other news, a Korean crypto firm has raised $140 million, China’s AI sector is valued at $1.4 trillion, and there is an ongoing battle involving Huobi in Asia Express magazine.