Delaying the taxation on cryptocurrency earnings by three years is a proposal put up by the right-wing political party in South Korea. The nation’s cryptocurrency gains tax will be delayed from the start of 2025 to 2028 if the bill is approved.
According to the bill’s explanation on the website of the South Korean National Assembly, “most investors are expected to leave the market if the country imposes an income tax on an asset that has higher risks than stocks, as at the moment, investor sentiment for crypto is negative.” Last Friday, a bill proposal was made.
A 20% tax on cryptocurrency gains was first supposed to go into effect on January 1, 2022, but because of strong opposition from investors and industry insiders, it has already been postponed twice, to January 1, 2025.
The current president of South Korea, Yoon Suk-yeol, is a member of the right-wing People Power Party, which promised to repeal the cryptocurrency gains tax in the most recent general election.
According to Suk-yeol, taxation will be inconsistent unless there is a defined legislative framework for defining cryptocurrencies within the national system. In order to maintain transparency and investor protection, it would be preferable to delay the tax until the cryptocurrency market has developed and new law has been carefully prepared.
In order to assist regular investors, Suk-yeol pledged to remove the capital gains tax during the election campaign. He also stated that taxes on cryptocurrencies should be delayed by two years. His position on the subject emerged in the midst of a presidential election campaign in which leaders from both parties were vying for the support of millennial and Generation Z voters.
The country’s Ministry of Economy and Finance reportedly stated that it hasn’t decided whether to postpone the crypto tax further, according to local news sources. At the end of this month, the ministry is expected to announce fresh changes to the tax legislation.
The nation is home to one of the biggest and busiest crypto marketplaces worldwide. As of the end of last year, the Financial Services Commission estimated that 6.5 million citizens, or 12.5% of the total population, were using cryptocurrency. According to Kaiko data, in the first quarter of 2024, the Korean won surpassed the US dollar as the most popular fiat currency for cryptocurrency trading.
