South Korean authorities have announced a delay in its proposed crypto tax policies. Some members of the ruling executive stated that there would be no crypto tax policy until the industry is adequately regulated in the country.
Objections Regarding The Policy
The ruling party was against the proposed plan to tax profits made by players in the digital asset industry. There are even unconfirmed reports that the legislature has passed a policy to suspend policy permanently. The initial plan was for the tax law to come into effect by the beginning of next year.
A top member of the ruling party, Noh Woong Rae, stated that implementing a tex policy when the country’s crypto regulations aren’t adequate looks premature. Hence, the right course of action is to delay the plan. This member further reiterated that even if the tax policy was enacted, there was no way it would have been implemented in a way that suits that ministry of finance.
He also said adequate taxation of foreign operations is almost impossible because of the private nature of crypto transactions. However, Rae said the party would meet with the national assembly to resolve the issue.
“Since the standing committee is yet to reach a unanimous decision regarding this issue, we intend to seek the approval of the lawmakers in delaying this issue at the national assembly level,” Rae concluded. The country’s finance chief would be disappointed with this new development. Earlier in the year, when media men quizzed him regarding this issue, he argued that nothing could stop the implementation of the policy, whether this year or next year.
Citizens Won’t Mind Crypto Taxation
A recent survey revealed that more than 51% of Koreans wouldn’t mind the proposed crypto taxation. Their opinions contradict that of the authorities, who have various concerns regarding the policy and its implementation. Polled citizens revealed that they wouldn’t mind that digital asset players pay 21% tax and be fined almost 39% for breaching any tax rule.
When categorized according to age groups, most of those above 50 years agreed that the law should be approved. However, those less than 30 years old didn’t agree with their older counterparts. Strangely, most females wanted the authorities to approve the digital asset tax law than their male counterparts.
Genesis Of The Controversy
The proposed tax law stipulated that any digital asset income that surpasses 2.5m won should be subjected to 20% tax, and the policy will come into effect by next year. In contrast, tax income from stock market gains starts at 50m won, and the policy will come into effect by January 1, 2023. Hence, crypt enthusiasts argued that the tax law was partial towards the digital asset industry.
The authorities explained that the stock market’s classification as a financial asset is the reason for its less stringent tax law. Yet, crypto players weren’t satisfied with an unidentified person posting an online petition against this proposed tax policy. Over 55,000 persons have signed his petition.