South Korea’s conservative opposition wants to kill a planned crypto tax, according to a Thursday report. The People Power Party introduced legislation to scrap the 2027 rollout. The tax would hit crypto gains above 2.5 million won with a 22% levy.
The party says it’s unfair to retail investors. Enforcement would be a nightmare. Compliance could tank.
The bill would remove all digital-asset income provisions from the Income Tax Act. That’s according to the party’s proposal. Under current law, crypto investors would face a 20% income tax plus a 2% local tax once annual gains exceed the threshold.
Stock investors? They pay no capital-gains tax unless they’re major shareholders.
“The crypto tax is unfair compared with stock taxation,” the People Power Party stated.
Double taxation is another problem. Cryptocurrency’s already classified as “goods” under South Korea’s VAT regime. Adding an income tax layer means two separate levies on the same economic activity.
Enforcement’s a mess too. Authorities may struggle to verify acquisition costs. Profit calculations for foreign investors trading on overseas exchanges? Good luck with that.
The tax has been delayed three times already. That reflects the political sensitivity of regulating a rapidly growing retail crypto market. Lawmakers want to protect investor participation. Tax officials want tighter oversight. Tensions are high.
The opposition’s pushing to kill the tax. But South Korea’s National Tax Service is preparing to enforce it anyway.
The agency launched a procurement process for an AI-powered platform. It’s designed to analyze crypto trading data and detect suspected tax evasion. The system would track activity across exchanges. Tax authorities are moving ahead despite political resistance.
The ruling Democratic Party hasn’t endorsed the opposition’s proposal. The party says it lacks internal consensus on scrapping the tax. It’ll review the bill. That sets up a policy clash that could shape South Korea’s broader regulatory stance on digital assets.
The outcome will influence retail participation in crypto markets. Foreign investor interest too. And the government’s approach to monitoring digital asset trading.
Enforcement tools are already in development. Political opposition’s mounting. South Korea’s crypto tax has become a test case. It’s about balancing investor fairness with regulatory oversight in one of Asia’s most active digital asset markets.
