Korea's crypto tax up for debate as deadline approaches, again

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Korea's crypto tax up for debate as deadline approaches, again

Published: 26 Nov. 2024, 18:55

SHIN HA-NEE
[email protected]

Audio report: written by reporters, read by AI

The price of Bitcoin is displayed on a screen at the Upbit Lounge in Gangnam District, southern Seoul, on Tuesday. [YONHAP]

With a planned tax on cryptocurrency gains, championed by the liberal Democratic Party (DP), slated to take effect in just over a month, digital assets have emerged as the latest point of contention in the country's political arena.

Debate around the law, which imposes a 20 percent tax on cryptocurrency gains of more than 2.5 million won ($1,788.14), has intensified as its effective date of Jan. 1 nears. The government and conservative People Power Party (PPP), aligned with President Yoon Suk Yeol, seek to delay the imposition for another two years while the DP is pushing to levy the tax as planned — with a much higher threshold of 50 million won for taxation.

The National Assembly's Strategy and Finance Committee canceled Tuesday's planned plenary meeting, leaving the decision pending after the two parties failed to reach an agreement.

“We should not dismiss the younger generation’s investments in digital assets and stocks as speculative, but rather acknowledge them as a new tool for building wealth and hope,” PPP leader Han Dong-hoon said during a leadership meeting on Monday.

“[The DP] will eventually concede with the public sentiment, so I don’t think there is any point in engaging in a needless tug-of-war,” said Han.

The legislative revision necessary for the cryptocurrency gains tax, first proposed in 2020, has been kicked down the curb twice now, in 2021 and 2022. The Yoon administration announced its intention to delay its implementation, under the Income Tax Act, for another two years in July.

The government and the PPP cited a lack of protective measures for investors and insufficient preparation regarding the infrastructure needed for fair taxation for the proposed two-year delay.

The DP, on the other hand, has been pushing to significantly raise the threshold for taxation from the current 2.5 million won to 50 million won, according to its campaign pledge during the general election in April.

BY SHIN HA-NEE [[email protected]]