The South Korean government is contemplating delaying the proposed implementation of a 20% crypto tax. The tax enactment has been a contentious issue and has raised numerous concerns among the country's citizens.
Per local media report, the delay probably stemmed from Lee Jae-Myung, the Democratic Party’s leader’s recent statement. The party leader had urged authorities to re-evaluate the timing of applying the tax policy on cryptocurrency income. In addition, there are speculations that the delay in the tax policy implementation and other digital asset-related policies could also emanate from the South Korean taxpayers' public opinion.
Meanwhile, controversies on taxation have emerged due to the intangible nature of crypto assets. Some opined South Korea has not attained the institutional preparedness to implement such a tax policy, describing it as "insufficient."
South Korea’s 20% Crypto Tax Delay History
Earlier, the country's authorities slated the taxation to begin in 2021, with the bill passed in the National Assembly the same year. However, this was not the case, as the tax implementation was postponed to 2023, citing an upcoming 2022 presidential election. For reasons undisclosed, the present administration chose to delay it further till 2025 and, most recently, till 2028.
Proposed Tax Implementation Can Impede Digital Assets Expansion.
The country boasts a total of over 6 million investors in crypto assets, disgruntled with the current crypto tax rate. Also, coupled with the fluctuating prices of Bitcoin and other cryptocurrencies and other economic factors, crypto asset trading volumes are plummeting in the country.
Furthermore, the proposed 20% crypto tax on crypto gains, if implemented, will negatively impact the South Korean crypto marketplace. It will result in crypto investors withdrawing from the market and trading volumes falling drastically. In addition, the Asian nation will witness a gross shutdown of crypto exchanges and other digital asset trading platforms.
