The ruling party of South Korea, known as the People Power Party, is making efforts to postpone the implementation of crypto gains taxes for an additional two years. This decision is part of the party’s campaign promises for the upcoming general election in April. According to local media outlet the Herald Business Daily, the party believes that before imposing taxes on crypto, it is essential to first establish a comprehensive framework for the industry. They argue that taxation should only be considered once this foundation is in place.
A representative from the ruling party emphasized that the tax base for crypto has not yet been established. Unlike the stock exchange, there are currently no entities responsible for overseeing crypto transactions. The party believes that a two-year time frame is necessary to develop a system to address this issue. The official also stated that taxation should aim to protect the country’s assets and the well-being of its citizens, highlighting the negligence of certain government aspects towards the crypto market thus far.
The plan to tax profits from crypto trading was initially announced in January 2021. According to the proposed 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 of stocks, where gains above 50 million won (around $37,400) are taxed.
The implementation of the crypto gains tax has faced multiple delays in the past. Originally planned for 2022, the tax was postponed until 2023 due to flaws in the information-gathering procedures conducted by the National Tax Service. In July 2022, government officials announced another two-year delay in the implementation of the 20% crypto gains tax. This decision was attributed to the stagnant market conditions within the crypto industry at that time. Bitcoin (BTC) was trading around $20,000 and had reached a low of $16,000. The government also cited the need for additional time to establish measures to protect investors.
In other news, a Korean crypto firm recently raised $140 million in funding. Additionally, China’s AI sector is valued at $1.4 trillion, and there is an ongoing battle involving Huobi, a prominent cryptocurrency exchange, in Asia.