The increasingly influential People Power Party would delay capital gains taxes from 2022 until 2023, and raise its starting point from about $2,100 to more than $40,000.
South Korea’s newly empowered opposition party wants changes to the government’s incoming cryptocurrency taxation policy.
The People Power Party has introduced a bill that would delay the imposition of capital gains taxes on cryptocurrencies one year from its current Jan. 1, 2022 to 2023, and dramatically raise the level at which those taxes kick in.
According to the Korea Herald, PPP lawmakers not only want to push back the start of crypto taxation, they want to increase the point at which those taxes are levied from 2.5 million won, about $2,100, to 50 million won, almost $42,000.
The ruling Democratic Party of Korea intends to impose a 20% capital gains tax rate at 2.5 million won. The PPP plans to revise that to 20% for gains of 50 million won to 300 million won — about $250,000. It would then increase to 25%. Rep. Cho Myoung-hee of the People Power Party said:
“It is not right to impose taxes first at a time when the legal definition of virtual currency is ambiguous. The intention is to ease the tax base to the level of financial investment income tax so that virtual currency investors do not suffer disadvantages.”
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Opposition Grows
The opposition’s policy could prove important in the run-up to March’s presidential elections. The PPP has had several big electoral gains this spring, capturing the extremely powerful mayoralty of the capital, Seoul, and winning several important by-elections to replace departed parliament members. And the president has been seeing his voter approval numbers plunge as the PPP’s rise recently.
Meanwhile, the DPK is seeing rising opposition to the tax — originally scheduled to go into effect on October 1 — from within its own ranks as well as the PPP, the Korea Times reported last week.
But the Deputy Prime Minister and Finance Minister, Hong Nam-ki, was adamant that the tax would go forward as planned, noting that it has been in the works for two years. He said:
"Any further delay in the already postponed enforcement will lead to the loss of public trust in government policy and undermine stability in the legal system.”
