The ruling Toburo Democratic Party in South Korea intends to adopt a law that will postpone the introduction of a capital gains tax on transactions with cryptocurrencies for a year, local media reports.
Earlier, the Ministry of Economy and Finance determined that the new requirements will come into force on January 1, 2022. The tax will amount to 20% of the received profit exceeding 2.5 million Korean won (~$2100).
Noh Woong-rae, a member of the National Assembly, said that the introduction of the tax is not technically prepared. According to him, the ministry’s policy on this issue is “administration that ignores reality.”
Administration that ignores reality
For example, it is extremely difficult for fiscal departments to obtain tax data on transactions on foreign exchanges or P2P transactions, the parliamentarian believes. This can create “blind spots”. Moreover, instead of fair taxation, will promote tax evasion and undermine confidence in the government, he noted.
“In a situation where the relevant tax infrastructure is not sufficiently prepared, delaying the taxation of virtual assets is no longer an option – it is inevitable,” Noh Woong-rae stressed.
The bill is under consideration by the relevant committee of the Parliament. According to the politician, the party expects its adoption before October 1.
The law on taxation of cryptocurrencies
The Minister of Economy and Finance, Hong Nam-ki, has already promised that the requirements will come into force on January 1, 2022, despite the opposition of the ruling party.
He recalled that last year the government supported the law on the tax on transactions with cryptocurrencies. The opposition and the Democratic Party, which has a small majority in parliament, also supported the law.
Recall, according to the survey, more than half of South Koreans approved the introduction of the tax. The study involved 500 people over the age of 18 years. Of these, 53.7% approved the law on taxation of cryptocurrencies, which will come into force on January 1, 2022. 38.3% of respondents were against it.