South Korea’s ruling party, The People Power Party, pledged to delay crypto gain taxation for an additional two years as part of its campaign promise.
The People Power Party of South Korea will curry favour with its latest campaign promise. South Korea’s ruling party has promised to delay taxation on crypto gains for another two years ahead of the upcoming elections.
Crypto Taxing is Only Possible Once a Base Framework is Established
According to reports by the Herald Business Daily, The People Power Party, South Korea’s ruling party, said it will delay taxes on crypto gains for another two years. As one of its campaign promises for the upcoming April elections, the party said it believes a general framework for crypto must be established before taxing the industry can commence.
The right-wing party pledged to establish a basic regulatory framework for the crypto industry before introducing tax guidelines. It said it plans to propose a new set of regulations for the sector in the upcoming term. The potential delay comes after the country’s crypto gain tax was scheduled to go into effect in January 2025 after being delayed from its initial starting date of January 2023. Should another two-year delay be introduced, it would push the tax plan back to take effect in January 2027.
20% Tax Plan Announced in 2020
South Korea initially announced it would implement a hefty 20% tax on crypto-asset gains in 2020, starting January 2023. Strong protests from investors, however, resulted in the plan being delayed starting in 2025. The initial 20% tax on crypto gains above 2.5 million KRW was supposed to go into effect on January 1, 2022.
The 2023 start date did also not sit well with investors who argued the tax would cripple the burgeoning crypto industry in South Korea. Other arguments claimed the tax threshold was too low considering the proposed stock market tax on capital gains above 50 million KRW.
Ruling Party Mulls Over a New Bill
As part of The People Power Party’s election campaign, the ruling party is going back and forth considering a new bill that contains essential elements for potential crypto regulations. The proposed legislation includes setting requirements for crypto custody providers and token listings.
The ruling party will reportedly finalize its core election promises by the end of February.
Comprehensive Crypto Regulation
Citing concerns over the illegal outflows of domestic funds, South Korea’s Financial Services Commission (FSC) proposed changing its Credit Finance Act to ban local citizens from buying cryptocurrencies using credit cards. The country’s Ministry of Personnel Management also recently announced that around 5,800 public officials must disclose their property ownership details, including crypto holdings. In an effort to improve transparency in public service, a high-ranking public official must report their holding to the Public Ethics and Transparency Initiative starting next year.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
