The People Power Party in South Korea has called for a one-year delay in the crypto taxation laws. The opposition party states that this delay will give legislatures enough time to revise the taxation rate.
The party has proposed that the enforcement of the crypto taxation laws be postponed to January 1 2023. Some of the amendments the party has proposed include a 20% tax to crypto traders who make profits of over $42,000. The current tax rate calls for taxation on profits above $2900.
Not the Right Time
According to a local publication, the People Power Party proposes to table a bill that will postpone the taxation rules by one year. Representative Cho Myoung-hee, an opposition party member, stated that several factors needed to be addressed before these rules were enforced.
“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,” Myoung-hee stated.
Besides delaying the taxation law, the opposition party also calls for a revision in the taxation rate. The tax law to be enforced in January 2022 charges a 20% tax to crypto traders who make profits of over $2900. The People’s Power Party wants to change this threshold to profits of between $42000 and $251,000. Those who make gains above $251,000 will be taxed 25%.
South Korea has planned to start taxing crypto profits from January 2022. The country’s Finance Minister, Hong Nam-ki, had earlier termed this move as “inevitable.” Nam-ki also opposes this current proposal by the People Power Party, stating that it was “difficult to delay taxation on virtual assets in terms of policy reliability and legal stability.”
Ruling Party is also South Korea Opposing Taxation Law
The ruling party in South Korea had previously tried to postpone the implementation of this tax law. At the time, Noh Woong-rae, a member of the ruling party, stated that South Korea did not have a solid structure that could facilitate the implementation of the tax law. He stated that a relevant taxation infrastructure was needed before the taxation of virtual assets became an option.
The lawmaker also stated that the plan of the Ministry of Finance to implement a taxation law over digital assets would fail. The taxation could fail to work given the global nature of cryptocurrency trading, making it difficult to tax overseas crypto transactions or those done on peer-to-peer (P2P) transactions.
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