The ruling party of South Korea is, once again, considering the postponement of the enactment of crypto-specific taxes, as this could influence public opinion towards the government. The party aims to implement these taxation rules by 2028, citing a lack of necessary regulations and institutional infrastructure as the primary reasons for this measure.

South Korea to Defer Crypto Taxation Once Again Until 2028

South Korea is aiming to postpone the application of cryptocurrency-specific taxation until 2028. According to local reports, the ruling party in South Korea would be trying to lessen the impact on public opinion towards its administration due to the popularity of cryptocurrency as an investment asset in the country. Over 6 million South Koreans had invested in cryptocurrency by the end of 2023, and this would be pressuring the government’s decision on this issue.

This dissatisfaction with cryptocurrency taxation will also affect the trading market, as the recent price downturn has affected the volumes traded in national exchanges. If taxation gets to be applied next year, investors will be forced to leave the market, further affecting trading volumes according to market insiders.

Another of the reasons behind this possible measure is the lack of rules supporting the implementation of a clear cryptocurrency taxation system. An unnamed official consulted by Hankyung stated:

Secondary legislation is needed to classify cryptocurrencies and specify the types of business within the industry in detail so that taxes can be levied without difficulty.

Critics state that if postponed until April 2028 due to public opinion worries, the political cycle in that year, when elections will be held in April, will likely also result in another postponement.

If postponed, this would be the third time South Korea has deferred cryptocurrency taxation since the first time in 2021, when it was moved to happen in 2023. Then in 2023, it was also moved to 2025. Nonetheless, this is still being considered, as the Deputy Prime Minister and Minister of Strategy and Finance Choi Sang-mok stated that they “are reviewing it because there is time until the tax law revision bill is prepared.”

In February, similar takes were held on the issue, with an unidentified People Power Party leader stressing that taxation might be delayed until 2030.

Source : Bitcoin News - Jul 17, 2024