South Korea’s main opposition party has proposed scrapping a planned crypto tax ahead of its 2027 rollout, citing fairness, double taxation and enforcement concerns.
According to a Thursday report by local media outlet eDaily, the conservative People Power Party (PPP) introduced a bill to amend the country’s Income Tax Act and remove provisions on digital asset income, aiming to abolish a planned tax on crypto asset gains ahead of its 2027 implementation.
Under the upcoming rules, crypto gains exceeding 2.5 million Korean won will be subject to a 20% income tax and an additional 2% local tax starting on Jan. 1, 2027. The measure has already been delayed three times since its initial introduction.
The proposal sets up a potential clash with tax authorities, who have already started building systems to enforce crypto taxation next year, including a transaction analysis platform designed to track digital asset activity.
PPP points to fairness gaps, double taxation and enforcement hurdles
According to eDaily, the PPP argued that the current framework presented three major issues, including fairness, double taxation and enforcement challenges.
The party argued that most retail stock investors do not pay income tax on gains unless they meet thresholds for major shareholders, while crypto investors face a blanket tax.
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The PPP also said that since crypto assets are treated as goods under the value-added tax (VAT) framework, adding income tax risks imposing two layers of tax on crypto.
The party also pointed to enforcement challenges, saying authorities may struggle to determine acquisition costs for non-resident foreign investors who trade on overseas platforms.
Democratic Party senior deputy floor leader for policy Kim Han-gyu said the ruling party has not seriously discussed abolishing the tax but will review the proposal, according to local outlet Electronic Times.
Tax authority plans AI enforcement tool to track crypto gains
The proposal comes as tax authorities prepare to deploy enforcement tools for the upcoming crypto tax rollout.
On March 12, the Korea Times reported that the National Tax Service (NTS) opened a procurement bid for an artificial intelligence-powered platform to analyze crypto trading data and flag potential tax evasion.
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Source: https://cointelegraph.com/news/south-korea-opposition-proposes-scrapping-crypto-tax-2027?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
