Amid South Korea’s upcoming general election in April, the ruling People Power Party is advocating for a two-year postponement of crypto gains taxes, aligning with its campaign promises.
The party asserts the necessity of establishing a comprehensive regulatory framework for cryptocurrencies before imposing taxation. It argues that taxing crypto should only proceed once this foundational framework is in place.
Highlighting the absence of a defined tax base, a party representative notes the lack of regulatory oversight akin to traditional stock exchanges. The party deems a two-year timeline necessary to establish such a system.
Asserting the importance of taxation in safeguarding citizens’ property and lives, the ruling party criticizes the government’s historical neglect of the crypto market.
The proposal to tax crypto trading profits was initially introduced in January 2021, setting a 20% tax on gains exceeding 2.5 million won annually. This threshold notably contrasts with the higher threshold for stock gains.
Despite initial plans to implement the tax in 2022, delays ensued due to procedural shortcomings. In July 2022, another postponement was announced, citing market conditions and the need for investor protection measures.
The push to defer crypto gains taxes reflects ongoing debates surrounding regulatory clarity and taxation within South Korea’s crypto landscape, highlighting the complexities of integrating cryptocurrencies into traditional fiscal frameworks.
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