Political Opposition Wants A Year Delay on South Korea’s Crypto Tax Law

According to reports, the People Power Party, South Korea‘s opposition party, has proposed a one year delay in the implementation of the crypto tax rules for trading digital assets. They also plan to change the tax rate percentage, meaning that investors who earn more than $42,000 should be paying 20%. The initial legislation taxes gains over $2,900.

Hesitant with enacting the law

The current proposals state that South Korea will begin taxing profits earned from trading in cryptocurrencies starting January 1, 2022. Hong Nam-ki, the Finance Minister of South Korea, called the move “inevitable.”

But, South Korea’s People Power Party has some objections. According to The Korea Herald, lawmakers from the party are planning to introduce a bill that would allow them to postpone taxation rules until January 1, 2023. Rep. Cho Myounghee – a member of the opposition – explained:

“It is not right to impose taxes first at a time when the legal definition of virtual currency is ambiguous. The intention is to ease the tax base to the level of financial investment income tax so that virtual currency investors do not suffer disadvantages.”

They would also like to see a reduction in the tax rate. The financial regulators would punish any South Korean who earns more than $2900 with 20%. However, the People Power Party plans to increase that limit to those with profits between $42,000 to $251,000. 25 percent would be charged to those who earn more than $251,000.

However, Hong Nam-ki, Finance Minister, was again not open to the idea.

“It is difficult to delay taxation on virtual assets in terms of policy reliability and legal stability.”

The Democratic Party Also Wants a Delay Crypto Law

Notable is the fact that the ruling Democratic Party of South Korea tried to delay the forthcoming taxation rules. Recent legislation was passed by lawmakers that could have suspended the legislation completely. Noh Woong-rae, a member of the Democratic Party, stated back then that the East Asian nation doesn’t have a well-designed plan for implementing the taxing procedure.

“In a situation where the relevant taxation infrastructure is not sufficiently prepared, the deferral of taxation on virtual assets is no longer an option but an inevitable situation.”

Woong-rae stated that the Ministry of Finance’s plan to impose taxation on digital asset ventures would not work as planned. He said that it was difficult to tax overseas operations using crypto or peer-2-peer (P2P), transactions.