South Korean political parties in ‘de facto deal’ on delaying crypto tax

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Source: Adobe / o_du_van

The protracted political struggle over the South Korean crypto tax has entered a new – and perhaps decisive – chapter with the major parties reaching a ‘de facto consensus’ on a delay that could allow traders to transact tax free until 2024.

As reported, both major parties have pledged to abandon their hardline stance on crypto in what most analysts agree to see as a concerted vote ahead of next year’s general election – which will be held in March 2022. .

The ruling Democratic Party’s presidential candidate Lee Jae-myung has supported a one-year postponement of the tax, which is slated for launch on January 1, 2021. Unless amended, a set of Soon to be enacted tax laws will see crypto trading profits over $ 2,100 each year taxed at the flat rate of 20%.

Lee’s opposition rival also wants to delay the tax for at least 12 months, and a champion in the crypto industry, opposition People’s Power Party MP Cho Myung-hee, has campaigned tirelessly to derail the tax.

The case came to a head on Thursday when a large quantity of private members’ bills delaying the imposition of crypto reached the parliamentary committee stage. Members of the committee voted in favor of tabling a draft amendment in the National Assembly – only for the government to intervene as a last resort. The Strategy and Finance Department raised an objection that forced committees to re-table the issue at another committee summit on Friday.

The Moon Jae-in administration has taken a tough stance on crypto, banning initial coin offerings (ICOs) and blocking games that use tradable non-fungible tokens (NFTs).

But the Moon government is on the verge of running out of steam: either Lee or his opponent Yoon Seok-yeol is almost certain to succeed the president in March.

Now, Chosun reported, the ruling and opposition parties “tentatively agreed” to go ahead with a one-year postponement by amending the Income Tax Act at the meeting of the sub -tax committee of the strategy and finance committee of the National Assembly.

There is just one detail to be clarified: some MPs want to raise the threshold to give crypto investors parity with KOSDAQ stock traders, who do not have to pay income tax below one. annual total of $ 42,000. Others, however, want to stick to the initial threshold of $ 2,100, arguing that the activities of stock traders in the domestic market have a beneficial effect on the national economy. Crypto trading, they say, does not.

Newsis media added that if taxation is deferred “as claimed by ruling parties and the opposition”, the actual payment period is “very likely” to begin “in 2024” – at the end of the fiscal year 2023.

But the ministry will not die until the fight is truly lost. Newsis quoted an anonymous official from the Strategy and Finance Ministry as saying:

“The government’s position remains unchanged. There is no problem with the [incoming] tax system.

The outlet hinted that Moon himself could also support the ministry.

Lee Ho-seung, the head of the presidential policy bureau, was quoted as saying on a radio broadcast that although “several arguments” were made by parties “before the elections”, the government “feels a heavy responsibility to consistently adhere to policies already established by law. »___Find out more: – IRS warning: the IRS is coming – for billions of dollars in crypto-Argentina U-Turns on Crypto Tax With New Regulation

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