South Korea: Opposition’s Bill against Crypto Tax aims to delay the implementation

After internal disputes regarding the controversial crypto taxation law in South Korea, now the opposition has also hopped on the anti-crypto tax wagon with its exclusive bill. The People Power Party has drafted a proposal to tone down capital gain taxes on cryptocurrencies and will reportedly submit the bill by tomorrow itself.

The bill proposes the postponement of the crypto taxation law by one year, i.e., 2023. Furthermore, the bill also seeks a steep fall in the tax percentage enforced on cryptocurrency incomes according to the present law.

“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 Korea Herald quoted Rep. Cho Myoung-hee of the People Power Party.

Authorities determined to prevent delay in Crypto Tax implementation

Last week, Deputy Prime Minister and Minister of Strategy and Finance, Hong Nam-ki took a firm stance and reinstated that the implementation of the South Korean law for taxing income from virtual asset businesses will not see any postponement to the scheduled date, i.e., 2022 onwards. The government of South Korea is against any further delay, arguing that the move has come in lieu of maintaining legal and financial stability.

While former announcements saw the Democratic Party of Korea continue discussions on the postponement of taxation through the Virtual Asset Task Force, yet this will be the second official statement in a row confirming no further delay in the crypto taxation period. According to official statements, the cryptocurrency taxation policy will be implemented on January 1 next year, which will impose a 20% tax on the profits of the transactions.

At the latest parliamentary audit by the National Assembly’s Planning and Finance Committee, Hong Nam-ki noted, “It is judged that it is difficult to re-adjust or postpone the taxation of virtual assets in terms of legal stability or policy reliability…We believe that the taxation infrastructure for the use of real-name accounts is in place, and virtual assets traded through exchanges are sufficiently taxable,”.