In an intriguing move within the South Korean political landscape, the ruling People Power Party has proposed a further delay to the enactment of cryptocurrency taxation, possibly pushing the commencement date to the year 2027. As the nation gears up for the upcoming general elections in April, this decision appears to be a strategic element of the party’s campaign.

Regulatory Framework Takes Precedence Over Taxation

The People Power Party has put forth the idea that establishing a fundamental regulatory framework for the burgeoning cryptocurrency market is a more pressing concern than the immediate imposition of taxes. In line with this, the party has outlined plans to roll out new regulations targeting areas such as crypto custody services and the criteria for token listings. These regulations are expected to serve as an extension to South Korea’s initial crypto regulations set to be operational from July.

Strategic Delay in Crypto Taxation

Originally slated to begin in January 2023, the crypto gains tax was subsequently postponed to January 2025. The latest proposal for a further delay underscores the party’s dedication to constructing a well-thought-out regulatory environment prior to introducing taxes. By the end of this month, the party aims to solidify its core promises for the election.

Could Income Tax on Crypto Be Eliminated?

Amidst these developments, there have been hints from the Ministry of Economy and Finance about a potential discussion in the legislative assembly regarding the removal of income tax on cryptocurrencies. This notion is in harmony with the government’s larger vision to do away with taxes on various financial investments. Despite this, a complete eradication of crypto taxation is not on the agenda for the People Power Party, according to reports from Herald Business Daily.

Seeking Tax Equity

The party is also advocating for a crypto tax threshold that aligns with that of stocks, in a bid to create a fairer tax system. As it stands, a 22% tax is applied to crypto gains above 2.5 million Korean won, in stark contrast to the tax on stock gains which is only levied after 50 million won.

Transparency in Governmental Crypto Holdings

Adding to the country’s efforts to foster transparency, a new policy announced in December mandates that high-ranking public officials disclose their cryptocurrency holdings starting the subsequent year. The policy is designed to prevent conflicts of interest and maintain high ethical standards among those in government positions.

International Collaborations

Finally, on an international front, Lee Bok-hyun, the head of South Korea’s financial oversight, has expressed intentions to hold discussions with U.S. SEC Chairman Gary Gensler. The dialogue is expected to revolve around the crypto industry, with a particular emphasis on spot Bitcoin ETFs.