The Virtual Asset Tax that proposed a short term capital gain tax of 20% on the profits gained was postponed by the South Korean lawmakers to 2023, eyeing the young investor’s support in the upcoming presidential election in 2022. The proposed tax was resisted by the crypto investors as it was unfairly drafted.
The South Korean lawmakers initially proposed a virtual asset tax to bring crypto assets under the tax regime. This proposal has now been postponed until the year 2023 as all the Korean youngsters are against the high proposed tax. The youngsters between the age of 20 and 30 are estimated to be the largest crypto investors in the country and the law makers are reluctant in introducing the tax before the presidential elections in 2022 as it could negatively impact the Government support by these youngsters.
The proposed tax would have levied a staggering 20% tax on the gains obtained from crypto within a period of 1 year starting from January 1, 2022. The tax has to be levied on the gains over US$ 2,122 in a year opposed to the taxes being levied on the stock investors over US$42,450. The youngsters are claiming this tax regime to be unfair for the crypto investors as there should be equality in tax laws across all the asset classes.
There was a huge resistance against the proposed tax laws in South Korea and the crypto investor community frowned upon it. The Korea Blockchain Association (KBA) after the postponement of the tax law, claimed that it was a victory for the crypto community and it is uncommon for the Governments to postpone the proposed tax bills showing the strength of the crypto community in the country.
Disclaimer: The article is meant for the educational purpose only and in no way it should be considered as financial advice. Own research on the topic is advisable.
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