South Korean lawmakers are considering abolishing a new crypto tax law six months before it comes into force. The National Assembly Legislative Research Service mentioned the possibility of a debate on the abolition of the crypto tax in the latest edition of the National Assembly Legislative Policy Guidebook. Lawmakers are set to vote on proposals to scrap a proposed tax on gold investment, which could lead to discrimination against investors in assets like stocks and crypto. The guidebook suggests that virtual assets are similar to stocks and should be treated equally in terms of taxation.
The crypto tax law, which was first voted into law at the start of the decade, has been a divisive issue in the assembly from the beginning. Initially intended to come into force in January 2022, it was postponed multiple times, with the latest launch date set for 2025. President Yoon Suk-yeol’s People’s Power Party promised to further delay the rollout for two years if the party performed well in the recent legislative elections, which it did not. Lawmakers are now facing pressure to reconsider the tax, with some calling for it to be canceled altogether.
Crypto enthusiasts argue that there should be investment parity in the tax treatment of different assets, as domestic investment in South Korea has been sluggish for years. The administration of former President Moon Jae-in took a strict approach to taxing crypto income, while President Yoon’s administration has indicated a desire to ease the tax burden on investors to stimulate growth. Critics of the tax argue that the thresholds for crypto traders are much lower than those for domestic stock market traders, making it unfair.
With just six months remaining before the crypto tax is set to launch, experts believe that lawmakers will make a decision on whether to abolish or postpone the tax before the end of the current National Assembly session. Some have called for crypto to be included on a list of tax-free financial investments, highlighting the need for fair and consistent taxation policies across different asset classes. The debate over the crypto tax law reflects broader discussions about investment and taxation in South Korea, with stakeholders on both sides advocating for policies that support economic growth and fairness.
