South Korean officials are in talks to delay the passage of a cryptocurrency tax bill scheduled for later this year, according to a report by local newspaper Hankyung today.
The country has one of the largest trading volumes in cryptocurrencies and recently even surpassed the stock market. Young people suffering from a sluggish economy and high unemployment are choosing the cryptocurrency market to find and make money.
No crypto, yes crypto
So far, Korea has been largely friendly to the cryptocurrency sector, allowing companies to operate in the market and citizens to invest without any repercussions. Earlier this year, however, some officials proposed a 20 percent tax on cryptocurrency income, sparking controversy among local investors. But now they can get some relief.
This morning, Yang Hyang-ja, a member of South Korea’s National Assembly and a member of the Democratic Party, advocated the need for a new tax system compatible with cryptocurrencies, postponing any tax proposal for at least a year.
A member of Korea’s ruling party is proposing to delay the tax on cryptocurrencies for at least a year, believing it will take time for institutions to accept and understand cryptocurrencies, Du Wan Nam, head of Asia business at MakerDAO in Seoul, said in a tweet on the matter.
A member of Korea’s ruling party suggests delaying the tax on cryptocurrencies for at least a year, saying it will take time for institutions to accept and understand cryptocurrencies. https://t.co/H4aNP0beSh https://t.co/qoPTbyV5x4
– Doo (@DooWanNam) April 26, 2021
It is understandably difficult to accept paying taxes when there are no assets, Ayan-ja said in the report.
She explained that although cryptocurrencies are classified as assets in the country and the taxation of any capital gains is significant, the market is still fledgling and proper preparation is needed first.
If you say that in a situation where the ownership of a virtual currency is not well regulated, it will be difficult for you to gain the trust of the market, Gyan-ja said, adding that a system based on an unstable market will only cause fear and change itself.
Drain SEC
Korea’s upcoming digital victory, which was at an advanced planning stage last year, was suggested by Hyang-ja as a way to gradually introduce cryptocurrencies into the country.
Early introduction of digital currency by the central bank could be a way to achieve this, she said, explaining that the gradual introduction of digital currency is important to make the sector more accessible to ordinary investors. There is no system that can prevail against market opposition, she concludes.
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