South Korea’s newly elected president is demonstrating his crypto expertise by declaring that there will be no tax on crypto investment gains until legislation can ensure consumer protections.
Yoon Seok-yeol, South Korea’s newly elected president, announced on Tuesday that he will push to postpone taxation on crypto investment gains at least until a new set of regulations known as the Digital Asset Basic Act is enacted.
South Korea’s crypto tax was supposed to go into effect in the fiscal year 2022, but it was pushed back to 2023 last December. According to E-daily, Yoon will ensure that the crypto tax law does not go into effect until reasonable legislation to protect consumers is in place, which could be by 2024.
Since March, when Yoon won the election, the president-presidential elect’s transition team has been exploring options for postponing the tax because there was insufficient legislation in place to justify taxing digital assets.
DABA was conceived this year by the Financial Services Commission (FSC) and includes a slew of consumer-protection laws. The act addresses token issuances, nonfungible tokens (NFT), centralized exchange (CEX) listings, and international crypto finance, and includes a response to US President Joe Biden’s executive order on crypto.
The FSC intends to introduce a crypto-insurance system via DABA as a safeguard against hacks, system errors, and unauthorized transactions.
The contentious crypto tax legislation, which has been delayed yet again, would impose a 20% tax on crypto investment gains exceeding $2,100 per year.
According to an FSC representative, “taxation of investment income from virtual assets should be done after investor protections are in place,” according to E-daily on Tuesday.
Hashed CEO Simon Kim agreed that “it doesn’t make sense to impose a tax on cryptocurrency before enacting relevant statutes, which clearly state the scope of cryptocurrency-related businesses and are a prerequisite for taxation.”
While the FSC drafts new bills as part of DABA, Yoon intends to establish the Digital Industry Promotion Agency to serve as a clearinghouse for regulatory issues in the crypto industry.