South Korea Could Delay Crypto Tax Law after Consensus from Ruling Party

The Democratic Party of Korea (DPK) is set to delay the plans to impose taxes on Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term gains ahead of the presidential elections next year. According to The Korea Times, a consensus has been reached in the wake of the party’s intentions to gain the voter base’s confidence.

“The DPK reached a broad consensus in terms of delaying the timing of the taxation of cryptocurrency transactions for another year than earlier planned,” The Korea Times commented, citing an anonymous source from the ruling South Korean party. However, the Ministry of Economy and Finance could challenge the manoeuvre, which still has solid support from key lawmakers.

This is not the first time that politicians in South Korea have proposed a delay on the crypto tax. Two opposition party lawmakers already sought to postpone such a ruling’s enaction for up to two years.

If plans go as expected, the new crypto tax ruling that seeks to impose a 20% tax on crypto gains, classified as ‘miscellaneous incomes, and which applies to mining operations and ICOs could not come into effect starting January 1, 2022. Additionally, the ministry’s plan wanted to tax on gains made in one year of over $2,125.

Moreover, Representative Yoo Dong-soo, the Head of the party’s task force on cryptocurrencies, commented that the maximum deductible amount from crypto trading should be raised to 50 million won ($42,415).

South Koreans Support the Government’s Plans to Tax Cryptos

Recently, a study conducted by the Korea Social Opinion Research Institute (KSOI) revealed that most South Koreans want the government to tax cryptocurrencies. The survey was conducted between September 17 and September 18, where it found that just 33% of the participants opposed the crypto tax law. The media outlet noted that 1,004 adults participated in the KSOI study, and 55,3% answered ‘we should pay a tax on virtual currencies.’

South Korea’s crypto tax law was introduced this year, specifically in October, but policymakers successfully postponed its enaction until January 1, 2022.