Digital asset investors in South Korea will have an extra two years before they start paying their digital asset taxes if the ruling political party clinches onto power in the upcoming April elections.
The People Power Party (PPP), which took power in the 2022 presidential elections, faces a tough election in April to control the 300-member National Assembly currently dominated by the opposition Democratic Party (DPK). To emerge victorious, the ruling party is targeting every last vote it can garner, and the young tech-savvy digital asset investors are among the group it’s eyeing with pledges of tax deferment, according to local media reports.
The PPP’s election pledges include a promise to push the digital asset taxes by another two years.
The taxes were set to take effect in January 2025 after the government postponed them from the initial date in 2022. With the latest pledged postponement, the taxes would take effect in 2027, four years after they were originally set to be implemented.
The regime includes a 20% tax on digital asset gains exceeding KRW 2.5 million ($1,875), a contentious clause since the threshold for similar taxes in the stock market is 20x higher at KRW 50 million. Currently, the tax regime exempts non-fungible tokens (NFTs) as they are not considered digital assets in Korean law.
The PPP intends to amend the tax framework to ease up on some of the stipulations. Still, it will not abolish the taxes altogether, as proposed by some leaders.
Aside from postponing the taxes, the ruling party pledged to implement a comprehensive regulatory framework for the industry. South Korea has relied on general financial and tech laws and the Financial Services Commission (FSC) to oversee the sector—although even this oversight was contended by the central bank.
However, under the proposed framework, robust laws will cater to digital asset custody, token listing, and other facets of the industry. The proposals come amid a new ‘crypto’ framework set to take effect in July this year and other proposed laws.
Watch: How BSV will power the machine-to-machine economy
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
