FameEX Hot Topics | South Korean Ruling Party Promises Two-Year Postponement of Crypto Tax Amid Approaching Elections

South Korea's ruling People Power Party is advocating for a two-year postponement of cryptocurrency gains taxes, aligning with its campaign pledges ahead of the April general election. The party stresses the need to establish a comprehensive regulatory framework for cryptocurrencies before introducing taxation, emphasizing that taxation should only occur once this framework is in place.

According to the Herald Business Daily, the party asserts that a foundational framework for cryptocurrencies is imperative before implementing taxes. Unlike the stock market, where oversight entities monitor transactions, the absence of such oversight in crypto transactions necessitates the establishment of a regulatory system, a process estimated to take two years. The party underscores the importance of taxation measures to safeguard national property and citizens' lives, highlighting previous governmental negligence towards the crypto market.

The proposed tax plan was introduced in January 2021, intending to levy a 20% tax on crypto gains exceeding 2.5 million won annually, significantly lower than the threshold for stocks. However, implementation has been marred by delays. Originally slated for 2022, the implementation was deferred to 2023 due to procedural issues with information collection by the National Tax Service.

Subsequently, in July 2022, officials announced another two-year delay, citing the crypto market's stagnant conditions and the need for investor protection measures. During this time, Bitcoin's price fluctuated from $20,000 to $16,000. This postponement reflects the government's commitment to addressing market challenges and ensuring adequate safeguards before implementing crypto gains taxes.

The move to delay the tax implementation has sparked debate, with some expressing concerns about potential revenue loss and others applauding the decision to prioritize regulatory clarity and investor protection. As the April general election approaches, the fate of the cryptocurrency tax remains uncertain, with stakeholders eagerly awaiting further developments and policy decisions from the government.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.