South Korea to review 22% crypto tax repeal request as opposition grows

South Korea’s planned cryptocurrency tax has come under renewed political scrutiny after a public petition seeking its repeal cleared the signature threshold required for legislative review.

According to South Korea’s National Assembly petition system, the motion surpassed 50,000 signatures at around 11:23 a.m. local time on Thursday, eight days after submission, automatically sending the proposal to a parliamentary committee for examination.

In the petition, an anonymous author argued that taxing crypto investors while exempting traditional financial investment income creates an unfair imbalance. 

The motion pointed to South Korea’s decision to abolish taxes on gains from stocks and bonds, while virtual asset investors still face a planned 22% levy on annual gains above 2.5 million won, or roughly $1,650.

A translated excerpt of the petition. Source: South Korean National Assembly

Set to take effect from Jan. 1, 2027, the tax includes a 20% income tax and a 2% local income tax under South Korea’s Income Tax Act. 

Earlier this month, Moon Kyung-ho, director of the Ministry of Economy and Finance’s income tax division, said during a National Assembly forum that the government intended to proceed with the tax as scheduled.

At the same time, South Korea’s National Tax Service has continued preparing implementation guidance with domestic exchanges including Upbit, Bithumb, Coinone, Korbit, and Gopax. Local reports previously said the agency plans to release detailed compliance guidelines later in 2026 before the first full filing period opens in May 2028 for income earned during 2027.

Petition raises investor protection concerns

Alongside criticism over tax fairness, the petition argued that South Korea’s crypto market still lacks sufficient investor safeguards. The motion cited fraudulent activity and poor-quality token listings as ongoing risks that authorities have not fully addressed before introducing taxation.

Translated text from the petition stated that the issue extends beyond tax rates and concerns how the government intends to treat digital assets and the future of the financial industry.

Additional criticism focused on market volatility. According to the motion, the current framework fails to properly account for large price swings that can rapidly alter investor positions.

Political disagreement over the crypto tax has delayed the measure three times already. Per earlier crypto.news reporting, lawmakers postponed implementation from 2025 to 2027 after debates over exchange infrastructure, reporting systems, and whether the 2.5 million won threshold was too low compared with other investment products.

More recently, South Korea’s People Power Party proposed legislation to abolish the tax before its scheduled rollout. However, the Finance Ministry’s latest public comments suggested authorities are still preparing for implementation unless lawmakers amend the law beforehand.

Elsewhere in South Korea’s digital asset sector, regulators have continued advancing new crypto oversight rules ahead of 2027. Earlier this month, the National Assembly passed amendments to the Foreign Exchange Transactions Act requiring firms involved in overseas crypto transfers to register with the finance minister.

Separately, the Financial Services Commission said on May 15 that it plans to release detailed tokenized securities rules in July ahead of amendments to the Capital Markets Act and Electronic Securities Act scheduled to take effect in February 2027. Samsung SDS is also building infrastructure for the Korea Securities Depository’s token securities platform as authorities prepare blockchain-based issuance and settlement systems.