South Korea's Ruling Party Proposes Two-Year Delay on Crypto Tax Implementation
Summary:
South Korea's ruling party, the People Power Party, has initiated a campaign to delay cryptocurrency gains tax for an additional two years. The party maintains a firm stance that a comprehensive framework for cryptocurrency must precede any taxation. The plan for instating a 20% tax on annual crypto gains exceeding 2.5 million won (~$1,900) was first announced in 2021 but faced several deferrals. The party believes that adequate measures need to be taken to ensure the protection of national assets and citizen lives before implementing the cryptocurrency tax.
South Korea's current party in power, the People Power Party, has initiated a campaign to postpone the tax on cryptocurrency profits for another biennial period. This initiative forms part of their pledge in the run-up to the general elections taking place in April, according to reports by the local Herald Business Daily. The political faction believes that instituting a comprehensive legal structure for cryptocurrency should be precedent to its taxation. The advocacy for tax implementation should only come after a fundamental framework has been put in place. A party spokesperson emphasized that the tax foundational groundwork is yet to be established. The spokesperson also pointed out that, unlike the traditional stock market, no bodies have the task of supervising digital currency exchanges. The party maintains that a two-year span would be needed to construct such a system. Furthermore, the party official argued that tax enforcement should safeguard national assets and citizen lives, noting the government's seeming oversight of the cryptocurrency sector. The initiative to tax profits from crypto trading was first publicized back in January 2021. Under this taxation framework, crypto investors netting annual profits above 2.5 million won (approximately $1,900) would be subject to a 20% tax. This benchmark falls below the threshold for stock trades, where only gains exceeding 50 million won (around $37,400) face taxation. The tax enforcement has faced several postponements over time. Initially, the tax was set to come into effect in 2022. However, legislators decided to defer the tax's implementation until 2023 due to deficiencies in the NTS's information analysis processes. In July 2022, government officers announced another two-year delay of the 20% tax imposition on crypto gains, citing stagnant market conditions in the crypto environment. At that time, Bitcoin (BTC) was trading at approximately $20,000, later plummeting to a low of $16,000. The government also mentioned the necessity for time to formulate protective measures for investors.
Published At
2/19/2024 12:17:22 PM
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