South Korea’s crypto taxation system, which will see the application of a 20% fee on cryptocurrency revenues exceeding 2.5 million Korean won ($2,100), will go into effect in 2022. Aside from the one-year postponement, MPs are also pressing for a tiered tax charge on cryptocurrency, similar to the Financial Investment Income Tax system, which is due to go into effect in 2023.
Representative Cho Myoung-hee, remarking on the need to lessen the burden on crypto entrepreneurs, suggested that a taxation system for cryptocurrencies should be consistent with the country’s financial venture income tax.
Members of Congress from South Korea’s opposition People Power Party have created a rousing task force to study the proposed crypto tax bill. According to The Korea Herald, competing lawmakers are pushing for a one-year delay in the start of crypto tax inside the nation.
Rather than the government’s 20 percent fixed amount on profits beyond $2,100, the lawmakers propose a 20 percent flat rate on earnings between 50 million and 300 million won ($42,000 to $251,000) and a 25 percent flat tax on profits beyond 300 million won.
South Korea’s cryptocurrency taxation policy is one of several stringent laws imposed by the state in latest years that may impact the government’s crypto sector in the future. The obligatory license requirement for South Korean digital currencies went into effect in September, forcing some smaller firms to close down.
The People Power Party’s opposition to the crypto tax bill follows a similar effort by MPs from the governing Democratic Party in September. Nevertheless, an agreement reached between MPs and the country’s minister of finance apparently put a stop to any intentions to postpone the implementation of the crypto tax law.