South Korea’s Ruling Party Delays Crypto Gain Taxation for Two More Years
South Korea’s ruling party, The People Power Party, has made a campaign promise to delay the taxation of crypto gains for an additional two years. This decision comes ahead of the upcoming elections, as the party seeks to attract support from the crypto community.
Why Taxation Can’t Happen Yet
The People Power Party believes that before implementing taxes on crypto gains, a comprehensive regulatory framework must be established. The party plans to propose new regulations for the crypto industry in the upcoming term. This approach aims to ensure that taxation is fair and conducted within a well-defined framework.
Previous Tax Plan and Investor Protests
In 2020, South Korea announced a 20% tax on crypto gains, scheduled to start in January 2023. However, due to strong protests from investors, the implementation was delayed until 2025. Investors argued that the tax would harm the crypto industry and that the tax threshold was too low compared to other forms of investment.
New Bill Considerations and Election Promises
The ruling party is considering a new bill that includes crucial elements for potential crypto regulations. This bill covers requirements for crypto custody providers and token listings. The party aims to finalize its election promises, including crypto regulations, by the end of February.
Other Measures to Regulate the Crypto Industry
The Financial Services Commission (FSC) of South Korea has proposed banning the use of credit cards to purchase cryptocurrencies, citing concerns about illegal fund outflows. Additionally, public officials will be required to disclose their ownership of cryptocurrencies as part of an initiative to improve transparency in public service.
Hot Take: Ruling Party’s Delay Reflects the Need for Clarity in Taxation
The decision by South Korea’s ruling party to delay the taxation of crypto gains for two more years indicates an understanding of the importance of establishing a robust regulatory framework before implementing taxes. This cautious approach acknowledges the unique nature of the crypto industry and aims to ensure fairness and clarity in taxation. While investors may be eager for taxation guidelines, it is crucial to prioritize comprehensive regulations that protect all stakeholders and foster sustainable growth in the crypto market.
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