The ruling party of South Korea, known as the People Power Party, has launched an initiative to postpone taxes on cryptocurrency gains for an additional two years. This move is part of the party’s campaign promises leading up to the general election in April. According to the local media outlet, the Herald Business Daily, the party has stated that it is essential to establish a general framework for cryptocurrency before implementing taxation. They believe that taxing crypto should only occur once this framework is in place.
A representative from the party emphasized that the tax base has not yet been established. Unlike the stock market, there are currently no regulatory bodies overseeing crypto transactions. The party argues that it will take two years to establish a system to address this issue. Additionally, the ruling party official stated that taxation should protect the country’s assets and the well-being of its citizens. They highlighted that certain aspects of the government have neglected the crypto market up until now.
The plan to tax profits from cryptocurrency trading was originally announced in January 2021. Under the proposed taxation rules, crypto investors who earn gains exceeding 2.5 million won (approximately $1,900) in a year would be subject to a 20% tax. This threshold is significantly lower than that of stocks, where gains over 50 million won (around $37,400) are taxed.
The implementation of this tax has faced multiple delays. Initially, it was scheduled to be implemented in 2022. However, lawmakers agreed to postpone it until 2023 due to flaws in the information-gathering procedures that would be carried out by the National Tax Service.
In July 2022, government officials announced another two-year postponement of the 20% tax on crypto gains. This time, the reason cited was the stagnant market conditions within the crypto industry. At the time of the announcement, the price of Bitcoin (BTC) was around $20,000 and later dropped to a low of $16,000. The government also stated that it needed time to establish measures to protect investors.
In other news, a Korean crypto company has recently raised $140 million in funding. Meanwhile, China’s AI sector has reached a value of $1.4 trillion, and there is an ongoing battle involving Huobi, a prominent cryptocurrency exchange in Asia.