South Korea has pushed back its controversial tax on crypto gains by one year. The National Assembly of South Korea passed a bill on Tuesday to push back the implementation of crypto taxation to January 2023. The bill once cleared by the plenary session would impose a 20% tax on crypto gains of more than 2.5 million ($2,253) annually.
The crypto taxation regulations have got mixed reviews since its proposal, there are many who believes the taxation would benefit the sector while there are others who see it as a burden. Earlier in April this year, finance minister Hong Nam-ki had claimed that crypto taxation is inevitable and dismissed any possibility of postponement.
Kim Young-jin, Chairman of the Tax Subcommittee believes imposing taxation on the crypto market without a clear government definition wouldn’t be a good idea.
“There is an inconsistent system for imposing taxes without a clear basis on how to legally define cryptocurrencies in our system… but only in Korea does taxation come before regulation.”
South Korea over the past couple of years has emerged as one of the leading nations in terms of crypto regulations. The country recently implemented new Anti-Money Laundering (AML) regulations, leading to hundreds of small and medium-sized crypto exchanges shutting their door. The new regulations implemented strict KYC rules and prohibited any form of shadow trading. Crypto exchanges were required to partner with local banks and build real bank accounts for traders, which only a few big crypto exchanges managed to achieve by the end of the deadline in September.
Is Crypto Tax Good or Bad For Crypto Ecosystem?
Crypto taxation has become one of the most talked-about regulations these days, where some countries like South Korea have formulated new crypto taxation rules while many other nations plan to tax it under existing rules. While people with Libertarian views don’t seem to be in favor of any form of taxation, market pundits believe it’s a good thing as it legalized and recognizes the crypto market.
Many small and tourist-centered nations are even planning to exempt crypto taxation in certain tourist hot spots and offer tax rebates to crypto companies to establish their business.