The planned tax on cryptocurrency gains in South Korea could be delayed by the ruling Democratic Party (DP).
A 20% tax on gains more than 2.5m ($2,116) through cryptocurrency trading designed by the Ministry of Economy and Finance was set to come into place on January 1 2022.
Opposition party members, as well as the ruling party members, agreed that a delay may be the best way forward in order to prepare fully for the new rules that would come into play.
Rep Park Wan-joo, who leads the DP’s policy planning committee, said the taxation plan was now under discussion and a decision will be announced soon.
“So far, the government is sticking to its original plan, but we will soon reveal our measures and discuss the issue at a government-party meeting or a standing committee meeting,” said Wan-joo.
Rep Kim Byung-wook said the ‘possibility is open’ when asked whether the plan of abandoning the crypto tax will be included in the election promises of Lee Jae-myung, the nominee of the Democratic Party in the 2022 presidential election.
Appealing to a younger demographic
Theories as to why the party has seemingly rethought the plan include attracting the votes of young people in South Korea who have strongly opposed the tax law.
Cryptocurrency has proven to be a popular resource for the millennial population in South Korea, with many seeing the industry as a ticket to affluence in a nation that has suffered high unemployment rates among the young.
Nearly 60% of total crypto investors in South Korea’s four major crypto exchanges are made up of 20 and 30-year-olds.
With the proposed tax plan comes greater control of cryptocurrency in the country that has led the four major crypto exchanges in Korea to pursue other streams of revenue.
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