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South Korea’s ruling Democratic Party of Korea (DPK) on Monday agreed with the opposition to a one-year delay in the imposition of taxation on gains from cryptocurrency trading of its citizens.
While it had been reported that the new legislation would not been delayed and implemented coming January, it seems that with the upcoming 2022 elections in the country, ruling and opposition parties are looking for their voters’ sympathy, especially those in their 20’s and 30’s, who are the most active cryptocurrency investors.
Noting that Korea’s Ministry of Economy and Fincance did not want to make amends to the legislation, Rep. Noh Woong-rae of the ruling Democratic Party of Korea (DPK) said in a press release:
“The delay is reasonable, considering that the government is not allowed to push ahead with such an underprepared taxation.
It is regrettable that the finance ministry’s opposition made it impossible to raise the threshold.”
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Woong added:
“Given that the ruling and main opposition parties reached an agreement, it can be seen that the taxation on virtual assets has been delayed for a year.”
While the The Ministry of Economy and Finance always maintained their stance that the government should start taxing cryptocurrency gains next year, there has always been criticism on the plan.
Earlier in November, DPK presidential candidate Lee Jae-myung said on on Facebook|:
“It is difficult to justify the hastened taxation with insufficient preparation.
It will cause tax resistance and confusion.”
The proposed tax would have charged a 20% tax on crypto gains made in a one-year period over KRW 2.5 million (US$2,122). Woong’s proposal that got dismissed called for a raise in the threshold of the tax on gains from virtual asset transactions to 50 million won ($42,000).
In another move ahead of next year’s elections, a day later on Tuesday the DPK said that it is considering temporarily lowering capital gains taxes on owners of multiple homes.