It has been confirmed that on Thursday, the South Korean legislators decided to delay the plans for a tax on virtual assets until 2023.
This tax would have imposed a 20% tax on crypto gains recorded in a one-year period over KRW 2.5 million ($2,122) beginning with January 1st, 2022.
It seems that lawmakers from both the ruling and opposition parties are focused on appealing to voters in their 20s and 30s who, statistically speaking, are more likely to be crypto investors which would naturally put them at odds with the proposed crypto tax. Why? In March 2022, the presidential election is scheduled to take place.
Harold Kim, the director of the Korea Blockchain Association, said that it’s pretty usual to encounter resistance from investors and the industry when it comes to tax plans. But what is “not common” is seeing lawmakers and financial authorities arguing over said proposed taxes and eventually declaring the plans are postponed.
Several crypto investors, including the Korea Blockchain Association director, have compared the planned tax for crypto gains to the proposed levies on stocks as a way of highlighting the fact that they aren’t treated fairly.
Stocks investors would have been required to pay taxes for gains made over KRW 50 million ($42,450) while for crypto investors the sum was established at a much lower level of $2,122 in capital gains. On top of that, investors were permitted to carry over stock losses for five years while carrying over crypto losses wasn’t allowed at all. Not to mention the fact that the virtual assets tax was planned to become law a year before the stock gains one.