South Korea May Have to Postpone Crypto Taxation, Lawmaker Declares
Godfrey Benjamin Sep 17, 2021 06:30
A push from one of the South Korean top lawmakers may stir the postponement of the crypto taxation billed to commence on January 1, local media reported.
Rep. Noh Woong-rae of the Democratic Party of Korea has expressed his scepticism about the possibility of the country’s Ministry of Strategy and Finance actualising its plans of taxing incomes from transacting digital currencies.
According to local news sources Thursday, the lawmaker believed the entities involved do not have the right infrastructure to carry out the exercise, a feat that may affect the success of the exercise.
“In a situation where the relevant taxation infrastructure is not sufficiently prepared, the deferral of taxation on virtual assets is no longer an option but an inevitable situation,” he said, adding his plans to sponsor a bill to defer the exercise, "As the relevant laws for tax deferral and real tax cuts are currently pending in the standing committee, we will actively persuade fellow lawmakers so that they can be dealt with in the regular National Assembly."
Backing his scepticism with examples bordering on how difficult it would be to obtain data for cryptocurrency transactions coming from overseas and P2P payments, the lawmaker pointed out that this situation can create several blind spots that will make the taxation efforts challenging to achieve success.
The country has been pushing cryptocurrency exchanges to get their books orderly, prompting them to form partnerships with banks operating in the country to capture users' data easily. While the biggest exchanges in the country, including UpBit, have met this demand from regulators ahead of the September 24 deadline, many others find it difficult to form the right partnership with banks and risk being banned from operating by the deadline.
Amongst the major clamour, the lawmaker is looking to change the taxation model on crypto. The current provision will tax income on crypto transactions as ‘Other Income’, while he will try to change this clause to “income from other financial products.”
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