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Opposition lawmakers are requesting a one-year delay in the law’s implementation as well as a reduction in the tax burden on cryptocurrency traders.
South Korea’s opposition People Power Party has prepared a new challenge to the proposed crypto tax law.
According to The Korea Herald, opposition lawmakers are advocating for a one-year extension to the start of crypto taxation in the country.
As previously reported, South Korea’s crypto tax regime that will see the imposition of a 20% levy on cryptocurrency gains above 2.5 million Korean won ($2,100) will come into effect in 2022.
Apart from the one-year delay, the lawmakers are also pushing for a tiered tax levy for crypto that is in line with the Financial Investment Income Tax regime set to be implemented in 2023.
Under the legislative proposal, instead of the government’s 20% flat rate on profits above $2,100, the lawmakers have suggested 20% on gains between 50 million and 300 million won ($42,000 to $251,000) and 25% of profits above 300 million won.
Commenting on the need to ease the burden on crypto investors, Representative Cho Myoung-hee argued that a tax regime for cryptocurrencies should be in line with the country’s financial investment income tax.
The People Power Party’s challenge to the crypto tax bill follows a similar action by lawmakers from the ruling Democratic Party in September.
However, an agreement reached between lawmakers and the country’s finance minister reportedly put an end to any plans to postpone the enactment of the crypto tax law.
South Korea’s crypto tax regime is one of several stringent regulations enacted by the government in recent years that may shape the country’s cryptocurrency market in the future.
The mandatory licencing requirement for South Korean crypto exchanges went into effect in September, forcing several smaller platforms to close down.