South Korea mulls delaying 20% crypto tax amid local pressure

South Korean authorities are considering postponing the controversial 20% crypto tax after the local crypto community raised concerns.

Initially set to begin in 2021, South Korea‘s 20% crypto gains tax might now be delayed until 2028 amid fears that the tax could devastate the local market, the Korea Economic Daily reports, without disclosing its sources.

South Korea’s Ministry of Economy and Finance is planning to impose a 20% tax on the amount exceeding the basic deduction of 2.5 million won (around $1,800), plus an additional 2% local income tax. According to the report, South Korea’s ruling party might be considering postponing the crypto gains tax, scheduled for implementation early next year, until 2028, making it the third delay by the government.

The report notes that talks about the possible delay arose after Democratic Party leader Lee Jae-myung implied the country’s need to “reconsider the timing of its [crypto tax] implementation.”

The Korea Economic Daily also highlights that the crypto gains tax implementation is technically difficult due to inadequate system and institutional preparation, with some saying that institutional readiness for the tax is “still insufficient.”

As crypto.news reported earlier, Korean crypto exchanges like Upbit, Bithumb, and Coinone argue that trading volumes will significantly drop once the tax is enforced, with an anonymous spokesperson from a crypto exchange saying that “many exchanges will probably shut down next year” if the tax is implemented as scheduled.