South Korean opposition set to tackle controversial crypto tax law

Opposition lawmakers are seeking a one-year delay in the enactment of the law as well as a lowering of the tax burden on crypto traders.

Lawmakers belonging to South Korea’s opposition People Power Party have prepared a fresh challenge to the planned crypto tax law.

According to The Korea Herald, opposition lawmakers are advocating for a one-year extension to the start of crypto taxation in the country.

As previously reported by Cointelegraph, South Korea’s crypto tax regime that will see the imposition of a 20% levy on cryptocurrency gains above 2.5 million Korean won ($2,100) will come into effect in 2022.

Apart from the one-year delay, the lawmakers are also pushing for a tiered tax levy for crypto that is in line with the Financial Investment Income Tax regime set to be implemented in 2023.

Under the legislative proposal, instead of the government’s 20% flat rate on profits above $2,100, the lawmakers have suggested 20% on gains between 50 and 300 million won ($42,000 to $251,000) and 25% of profits above 300 million won.

Commenting on the need to ease the burden on crypto investors, Representative Cho Myoung-hee argued that a tax regime for cryptocurrencies should be in line with the country’s financial investment income tax.

Related: South Korean lawmaker: Delaying tax laws on crypto is ‘inevitable’

The People Power Party’s challenge to the crypto tax bill comes on the heels of a similar action by lawmakers belonging to the ruling Democratic Party back in September.

However, an agreement between the lawmakers and the country’s Finance Minister reportedly put paid to any plans geared towards delaying the enactment of the crypto tax law.

South Korea’s crypto tax regime is one of many strict regulations enacted by the government in recent times that could shape the country’s cryptocurrency market moving forward.

In September, the compulsory licensing requirement for South Korean crypto exchanges came into effect with several smaller platforms being forced to shut down.