South Korea’s Upcoming Crypto Tax Law Inevitable, Says Finance Minister
South Korea’s Minister of Economy and Finance has stated that the upcoming tax on cryptocurrency trading gains proposed by the government is inevitable.
South Korea Not Going Back on Crypto Tax Policy
According to Reuters on Tuesday, (April 27, 2021), Hong Nam-ki made the statement at a news conference when asked if the crypto tax law would be put on hold until the government had a better oversight over the cryptocurrency industry.
The government official also classified crypto as “intangible assets”, while stating that labeling crypto assets as currencies were a “misunderstanding”. Nam-ki further warned that cryptocurrency trading was liable to fraud and illegal fundraising, and asked investors to exercise caution on what they decide to invest.
The finance minister’s comments come amid a growing opposition and criticism of the government’s proposed 20 percent tax on crypto trading gains exceeding $2,200. South Korea started making plans to implement its crypto taxation policy back in January 2020.
Meanwhile, the country’s crypto tax law was scheduled to take effect in October 2021, before the South Korean government decided to postpone the date for implementation to January 2022. According to the government, the new date would give crypto exchanges operating in the country ample time to work out the modalities needed to comply with the new crypto tax policy.
However, stakeholders and the crypto community in South Korea have kicked against the proposed tax law for the industry. As of February 2021, a petition against the cryptocurrency tax policy garnered over 35,000 signatures. Others have said that the proposed law could stifle the growth of the industry in the country.
Recently, South Korean Prime Minister nominee Kim Boo-kyum, said that he was looking into the proposed crypto tax policy. The primary concern for Boo-kyum was to ensure that there were no victims when the cryptocurrency tax law takes effect in 2022.
The cryptocurrency industry in South Korea continues to come under strict regulations, with the government looking to crack down on illegal crypto transactions and money laundering.
As previously reported by BTCManager back in March, the country’s tax agency said it was targeting over 2,000 individuals who hid their assets using crypto to avoid paying taxes, with concealed assets totaling over $30 million.