South Korean Lawmakers Still at Loggerheads Over Crypto Tax as Deadline Looms
South Korean lawmakers are still divided over the issue of crypto tax, with time running out for MPs to reach a consensus.
As things stand, a new law will come into force on January 1, 2025. This will force crypto traders to pay tax on annual profits over 2.5 million KRW (around $1,800).
South Korean Lawmakers: Time Running Out
Crypto investors claim this levy is deeply unfair. And lawmakers on both sides of the National Assembly have pledged to act.
However, the ruling People’s Power Party (PPP) currently finds itself in an impasse with the Assembly’s largest party, the Democratic Party (DP).
As previously reported, the DP has formulated a new law that seeks to raise the annual threshold to 50 million KRW ($35,750).
This would put crypto trading taxation on a level footing with stock market investment, which enjoys a similar threshold.
News1 reported on November 25, that the DP and the PPP discussed the matter at a meeting of the Tax Subcommittee of the National Assembly Planning and Finance Committee, “but failed to reach an agreement.”
Nothing Decided Yet, Says MP
One unnamed lawmaker said that “nothing was decided in today’s virtual asset taxation-related discussion.” The same MP said the parties would “discuss the matter again.” Another said:
“We discussed the matter. But we could not reach a consensus.”
Many in the PPP oppose the DP’s plan. Instead, they favor a vote on delaying the launch of the crypto tax until 2027 or 2028.
The South Korean media outlet Global Economic reported that DP floor leader Jin Sung-joon is taking “a hard-line stance” on the matter.
“Crypto tax was voted into law four years ago. Its launch has been postponed twice since then. But it is now time to launch the tax for the sake of legal stability.”
DP lawmaker and house leader Jin Sung-joon The DP floor leader and South Korean lawmaker Jin Sung-joon. (Source: Jin Sung-joon/Facebook)January Launch Looking Unlikely?
Jin has also claimed that crypto is “not related to the economy.” And he claimed that the DP’s proposal would “significantly” reduce “the tax burden” on crypto investors.
It appears that the DP is divided on the matter, however. The party’s leader Lee Jae-myung has reportedly “expressed doubts” as to whether a January 2025 launch is “realistically possible.”
Despite Lee’s reservations, the DP will continue to push ahead with its proposal this week, seemingly aware that if it fails, it may be forced to accept the PPP’s delay plan.
The PPP leader Han Dong-hoon recently told fellow South Korean lawmakers that while he supports the idea of launching the crypto tax, the launch “should be done fairly and in a well-prepared manner.”
He also told social media followers that the DP was not “fighting the government and the PPP” on the matter, but actually “fighting 8 million South Korean crypto investors and young people.”
More Guidelines Needed, Say Crypto Traders
The same media outlet quoted South Korean investors as stating that politicians were “blindly imposing taxes without proper guidelines.”
Others claimed that the tax is flawed as it only seeks to impose levies on the users of domestic crypto exchanges. One commenter wrote:
“Many people trade on overseas exchanges, so it seems realistically impossible to tax them.”
A deep divide has opened up between the two parties, which are also clashing over budget proposals for 2025.
South Korean lawmakers realistically need to conclude budgetary and crypto tax decision-making by December 2 to avoid emergency measures.
The parties have also been divided by controversies surrounding South Korean First Lady Kim Keon-hee and allegations of executive “cronyism.”
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