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South Korea’s ruling party is promising delays in running a tax on cryptocurrencies as part of an election promise.

The decision in this case could set the course for future tax policy in South Korea and have a significant impact on the domestic market.

Date: 2024-02-19 Author: Marek Stiller
South Korea’s ruling party is promising delays in running a tax on cryptocurrencies as part of an election promise.

The People’s Power Party , which rules in South Korea, is advocating a two-year deferral of taxes on profits from cryptocurrency investments. The move is seen as a possible campaign promise ahead of the general election, which will be held in April. The grouping wants to establish a comprehensive regulatory framework for cryptocurrencies before taxes are imposed.

Local media outlets tell Herald Business Daily that the right-wing party plans to introduce new regulations for the cryptocurrency industry in the upcoming midterms. It aims to delay the introduction of a tax on cryptocurrency profits, which is scheduled to take effect in January 2025, focusing primarily on regulations. The planned delay would start applying the tax plan in 2027.

The ruling party is considering introducing a bill containing key elements of potential cryptocurrency regulations as part of its election campaign strategy. These guidelines could include requirements for cryptocurrency storage providers, as well as guidelines for listing tokens.

If enacted, these regulations would complement South Korea ‘s first cryptocurrency legislation, which will go into effect in July. By the end of the month, the People’s Power Party aims to finalize major election promises.

A representative of South Korea’s Ministry of Economy and Finance suggested in a recent release that the country’s legislative body should consider abolishing income tax on digital assets.

This suggestion is part of the current administration’s efforts to abolish a planned tax on financial investments, including funds and stocks. The People’s Power Party, however, does not appear to be considering abolishing the planned tax on cryptocurrencies altogether, the Herald reports.

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The party seeks not only to advocate a tax delay, but also to equalize the cryptocurrency tax threshold with that of stocks. Currently, the tax plan imposes a tax rate of 22 percent on cryptocurrency profits exceeding 2.5 million Korean won, or about $1,875. This is in contrast to stocks which are taxed only when profits exceed 50 million won.

Last December, South Korea announced that starting next year senior public officials will have to disclose, the state of their digital wallets. The country’s Ministry of Personnel said at the time that this proactive method was aimed at resolving possible conflicts of interest and promoting integrity in the public sector.

The government mandates the disclosure of all their cryptocurrencies to ensure that public officials adhere to the highest ethical standards and avoid any potential conflicts that may arise from their activities in the cryptocurrency market. The requirements apply to high-level officials working in various government departments and agencies.

These officials will be required to present all of their assets, including all assets held and their exact amounts.

Meanwhile, the head of South Korea’s Financial Supervisory Service , Lee Bok-hyun, is scheduled to visit the United States to talk with Gary Gensler, chairman of the Securities and Exchange Commission (SEC), about the cryptocurrency industry. Bitcoin ETFs are expected to be the main topic of conversation.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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