Noh Woong-rae of the ruling Democratic Party of South Korea has proposed a “Partial Amendment to the Income Tax Act” that would delay the country’s taxation of profits on cryptocurrency assets until 2023.
The legislation, which Woong-rae hopes to pass in October, counters Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki’s intent to start taxing crypto profits in 2022 as outlined in the original version of the Income Tax Act.
Nam-ki said in April that taxation on crypto trading gains was inevitable. The Finance Ministry has previously said that cryptocurrency users will face a 20% tax on profits over 2.5 million South Korean won ($2,262).
Woong-rae and other critics argue that the “relevant taxation infrastructure is not sufficiently developed,” according to a report on Thursday by the news outlet Financial News.
“Insufficient infrastructure for taxation of virtual assets, deferral is inevitable,” said Noh who criticized the finance minister’s statement earlier this year.
Noh also said that Ministry of Finance did not have authority to start taxing cryptocurrency and that the decision was instead a legislative matter. He said that failing to mediate through proper channels would undermine citizens’ trust in their government and encourage tax evasion.
Noh said the country’s National Assembly is expected to pass the amendment, provided the ruling and opposition parties agree, according to the report.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.