A new proposed law in South Korea would postpone the implementation of the infamous crypto tax, allowing traders to avoid taxes on their profits until 2028.
The move what you make if you want to please a huge part of your population.
It was 2022. Then 2025. Now they want 2028.
Under the current law, South Koreans are set to start paying a 20% tax on profits over $1,800 annually starting in January 2025.
But now, several lawmakers have promised to review this law, and it seems there is a strong push to delay the crypto tax until January 2028.
This proposed change was reported by multiple South Korean media outlets, including EDaily and TokenPost, noting that over a dozen lawmakers have introduced a bill to amend the existing tax laws.
One prominent supporter of this bill is Song Eon-seok, the chairman of the National Assembly’s Strategy and Finance Committee and a member of President Yoon Suk-yeol’s People’s Power Party.
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Risk-reward ratio is influenced by taxes
The lawmakers behind this delay are told they’re concerned that imposing taxes on crypto traders might drive them away from the domestic market.
And they’re probably right. They believe that the current investment sentiment in virtual assets is already low, despite in the cryptocurrencies are extemely popular in the country and that most investors would likely exit the market if taxes were imposed.
This wouldn’t be a big surprise at all, given that virtual assets are considered high-risk investments, even more so than stocks.
These lawmakers argue that introducing the tax now wouldn’t be desirable and could create confusion in the market, as the tax system isn’t yet ready to handle crypto tax declarations.
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Changing laws
The debate over the crypto tax become an important political issue in South Korea, with the tax originally scheduled to take effect in 2022.
But since then, the launch was postponed twice, primarily due to the tax administration’s lack of preparation.
Despite some tax officials claiming readiness to collect crypto taxes, political parties have used the issue to gain voter support, especially among young, crypto-enthusiastic South Koreans.
The People’s Power Party has pledged to delay the tax, while the Democratic Party, the largest party in the National Assembly, proposed raising the annual tax threshold to over $36,000 to give crypto trading the same treatment as stock trading.
The DP also suggested allowing traders to defer losses for up to five years.
