South Korea’s right-wing People Power Party has introduced a bill to postpone the taxation of cryptocurrency gains by three years. If the bill passes, the implementation of the country’s crypto gains tax will be deferred from January 2025 to January 2028.
The bill, proposed last Friday, cites negative investor sentiment as a key reason for the delay. “At the moment, the investor sentiment for crypto is negative; most investors are expected to leave the market if the country imposes an income tax on an asset that has higher risks than stocks,” the bill’s description on the South Korean National Assembly’s website reads.
Originally, a 20% tax on crypto gains was slated to take effect on January 1, 2022. However, this has been postponed twice due to significant backlash from investors and industry experts, with the current effective date set for January 1, 2025.
The People Power Party, to which current President Yoon Suk-yeol belongs, had pledged during the last general election to delay the crypto gains tax further. This latest proposal aligns with their campaign promises.
Despite the proposed delay, the Ministry of Economy and Finance has not yet decided on additional postponements. The ministry is expected to announce new amendments to the tax code at the end of this month.
South Korea boasts one of the world’s largest and most active cryptocurrency markets. As of the end of last year, around 6.5 million citizens, or 12.5% of the population, were involved in crypto trading, according to the Financial Services Commission. Additionally, the Korean won was the most-used fiat currency for crypto trading over the U.S. dollar in the first quarter of 2024, according to data from Kaiko.
