According to the message released by the South Korean government, the government will collect taxes on digital currency profits as planned beginning next year. Taxation has become a contentious issue between the government and the opposition, with the latter requesting a one-year delay.
The tax regulation was supposed to take effect this month, charging a 20% tax on digital currency gains exceeding $2,125. However, after complaints from exchanges and dealers over a lack of preparedness, the government decided to postpone it until January 1, 2022. The opposition People’s Power Party has been working hard to push it back a year, but the administration is sticking to its guns and the deadline.
The Deputy Prime Minister and Minister of Finance, Hong Nam-ki, has been the driving force behind the bill. He has already dismissed efforts to delay its implementation, and during a recent parliamentary session, he reaffirmed his belief that there will be no more delays.
Hong was addressing at a legislative hearing in Seoul about the Ministry of Economy and Finance. “Any additional delay in the already postponed enforcement will lead to the loss of public trust in government policy and erode stability in the legal system,” he said in response to a question about whether the bill was rushed and if the government had the taxation infrastructure in place.
According to Rep. Yoo Gyeong-Joon of the opposition party, the administration is ill-prepared to tax the young business. He called the new system “an insecure system for tax administration,” stressing that it would disproportionately harm individuals who utilized local exchanges because the government had yet to establish a reporting mechanism for international exchanges.
In other news, the head of the Financial Services Commission has promised to investigate the listing and delisting practices of some of Korea’s major exchanges. In addition, legislators have leveled charges against Upbit, the world’s largest exchange, alleging that it has been arbitrarily listing and delisting tokens at will, raking in billions of won in the process.