SEOUL, South Korea, Friday, July 19, 2024 – South Korean lawmakers are considering delaying the implementation of a cryptocurrency tax until 2028, potentially allowing traders to avoid taxes on their profits for an additional three years.
The move follows previous delays that have already postponed the tax from its original start date.
Currently, the law mandates a flat 20% tax on annual profits over $1,800 starting in January 2025.
However, more than a dozen lawmakers, led by Song Eon-seok of the People’s Power Party, have proposed a bill to amend the existing tax laws to push the start date to 2028. They argue that imposing taxes now could drive investors out of the market.
Song Eon-seok, who also chairs the National Assembly’s Strategy and Finance Committee, expressed concerns about the current tax infrastructure.
The proposed delay has sparked debate about the government’s preparedness and intentions. While some see the delay as necessary due to administrative readiness, others argue it is a political maneuver aimed at gaining popular support, especially among young South Koreans who are heavily invested in cryptocurrencies.
The Democratic Party, the largest in the National Assembly, has also proposed reforms, including increasing the tax threshold to over $36,000 and allowing traders to defer losses for up to five years, to align crypto trading more closely with stock trading regulations.
This issue has become a political football in South Korea, with repeated delays since the tax was first scheduled to launch in 2022. The ongoing discussions highlight the tension between fostering innovation in the crypto market and ensuring effective regulation.
