South Korean authorities are considering delaying the contentious 20% crypto tax following concerns from the local crypto community. Initially scheduled to start in 2021, the 20% crypto gains tax might now be postponed until 2028 due to fears it could severely impact the local market, the Korea Economic Daily reports, without citing its sources.
South Korea’s Ministry of Economy and Finance plans to impose a 20% tax on crypto gains exceeding the basic deduction of 2.5 million won (around $1,800), along with an additional 2% local income tax. According to the Korea Economic Daily, the ruling party is considering postponing the crypto gains tax, which was set for implementation early next year, until 2028. This would mark the third delay by the government.
The report notes that discussions about a potential delay surfaced after Democratic Party leader Lee Jae-myung suggested the need to “reconsider the timing of its [crypto tax] implementation.”
The Korea Economic Daily further highlights the technical difficulties in implementing the crypto gains tax due to insufficient system and institutional preparation. Some experts believe the institutional readiness for the tax is “still insufficient.”
As previously reported by crypto.news, South Korean crypto exchanges such as Upbit, Bithumb, and Coinone argue that trading volumes will significantly drop once the tax is enforced. An anonymous spokesperson from a crypto exchange mentioned that “many exchanges will probably shut down next year” if the tax is implemented as scheduled.