South Korea’s ruling party plans to pass a bill to delay crypto taxation

By: Jinia Shawdagor
Jinia Shawdagor
Jinia is a cryptocurrency and blockchain enthusiast based in Sweden. She loves everything positive, travelling, and extracting joy and… read more.
on Sep 16, 2021
  • Per Rep. Noh Woong-rae, South Korea lacks the infrastructure to support crypto taxation.
  • The Democrat says deferring crypto taxation is inevitable due to the infrastructural issues.
  • Reportedly, 54% of the Korean population is willing to embrace the 20% tax on crypto gains.

South Korea’s ruling party, the Democratic Party of Korea, is planning to pass a bill that postpones the taxation of virtual assets before January 1, 2022. A report disclosed this news earlier today, noting the ruling party objected to Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki’s question of whether the Ministry of Finance should tax cryptos starting 2022 as initially planned. Per Nam-ki, taxing virtual asset holders would help maintain fairness.

According to the report, Rep. Noh Woong-rae of the Democratic Party said the deferral of crypto taxation does not require the permission of the Finance Ministry. He added that this is a matter that should be settled through legislation. Woong-rae further noted that if the Finance Ministry goes ahead to tax cryptos starting 2022, it would undermine trust in the government, as well as encourage tax evasion.

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He further pointed out that the country does not have a well-designed infrastructure to introduce crypto taxation. As such, deferring crypto taxation is no longer an option but an inevitable solution. According to him, the Ministry of Finance policy of implementing crypto taxation is not feasible. This is because it is problematic to secure taxation data from overseas and peer-to-peer (P2P) transactions involving crypto.

A plan to bring the crypto taxation motion to the National Assembly

After finding fault with the Ministry of Finance’s approach, Woong-rae said the Democratic Party would try to solve the issue at hand by taking it to the National Assembly.

Explaining how the party intends to use to achieve this feat, he said,

As the relevant laws for tax deferral and real tax cuts are currently pending in the standing committee, we will actively persuade fellow lawmakers so that they can be dealt with in the regular National Assembly.

Reportedly, opposition parties are currently processing several bills to suspend crypto taxation. Should there be a disagreement between the ruling party and the opposition, the bill will take a little longer before it becomes law. However, Woong-rae believes that the matter will be settled swiftly in the National Assembly provided both parties agree on suspending crypto taxation.

While South Korean legislators and regulators are unsure about crypto taxation, a recent report disclosed that 54% of Koreans support the country’s decision to impose a 20% tax on gains obtained from crypto trading. However, 54% mainly comprised older citizens. Meanwhile, about 50% of the population aged between 20 and 29 opposed the idea.

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