Korean Lawmakers Aiming to Pushback Crypto Tax Regulation Implementation

Crypto Regulation
Korean Lawmakers Aiming to Pushback Crypto Tax Regulation Implementation

South Korean lawmakers from the opposition People Power Party (PPP) are formulating a bill aimed at postponing the January 1, 2022 implementation of the 20-25 percent crypto tax law in the nation to 2023. The politicians also plan to revise the current requirements of the crypto tax regulation to ease the burden on investors, according to a Korean Herald report on October 11, 2021.

Lawmakers Kick Against Aggressive Crypto Taxation

Bringing a glimmer of hope to South Korean bitcoin traders, exchanges, and crypto-related businesses, lawmakers from the People Power Party (PPP), a conservative opposition political party, are set to submit a bill designed to water down the nation’s upcoming highly controversial crypto tax law.

Per sources close to the matter, the bill aims to reduce the burden on Korean crypto market participants by postponing its implementation to 2023 instead of the scheduled January 2022 launch date. It also seeks to revise the current crypto tax law, which requires investors to file a 20 percent crypto capital gains tax on profits above 2.5 million won (roughly $2,234).

However, the PPP lawmakers are proposing to impose a 20 percent tax only on crypto gains between 50 to 300 million Korean won ($42,000-$251,000) and a 25 percent capital gains tax for transactions above 300 million won, in line with the Financial Investment Income Tax slated to go live in 2023.

More Investors May Leave South Korea

Commenting on the bill, PPP Representative, Cho Myoung-hee, argued that the government’s proposed crypto tax law could be detrimental to crypto investors in the state.

“It’s not right to impose taxes first [especially] 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.”

While Korean authorities have opted not to follow the same crypto blanket ban route with its Chinese neighbors, the former has however been formulating somewhat draconian regulations designed to make life difficult for bitcoin-linked businesses as well as ordinary investors in the state.

As reported by BTCManager in June 2021, Korean watchdog, the Financial Services Commission (FSC) mandated financial institutions in the region to handle crypto-focused businesses as high-risk clients. The regulator also made it compulsory for lenders to put in place robust crypto transaction monitoring and ID verification protocols.

Earlier in August 2021, BTCManager informed that the heightened crypto regulations in South Korea have forced a good number of exchanges, including Binance and Bitfront to entirely suspend or limit services to Korean customers.

At press time, the bitcoin (BTC) price is hovering around $56,344, with a market cap of $1.06 trillion, according to CoinMarketCap.