South Korea mulls delaying 20% crypto tax amid local pressure

South Korean authorities are considering postponing a controversial 20% crypto tax after the local crypto community voiced concerns.

South Korea’s 20% tax on cryptocurrency earnings was initially scheduled to begin in 2021, but may be postponed to 2028 amid concerns that the tax could devastate the local market, the Korea Economic Daily reported without disclosing its sources.

South Korea’s Ministry of Economy and Finance plans to impose a 20% tax on amounts exceeding the basic deduction of 2.5 million won (about $1,800), plus an additional 2% local income tax. According to the report, South Korea’s ruling party may be considering postponing the crypto profits tax, which was originally scheduled to be implemented early next year, to 2028, making it the government’s third postponement.

The report said talks over the possible delay emerged after Democratic Party leader Lee Jae-myung hinted that the country “should reconsider the timing of the temporarily postponed decisions.” [crypto tax] “APPLICATION.”

The Korean Economic Daily also highlights that implementing crypto profits tax is technically challenging due to inadequate system and institutional preparation, with some saying that institutional preparation for the tax is “still insufficient.”

As Crypto.news previously reported, Korean cryptocurrency exchanges like Upbit, Bithumb, and Coinone are claiming that their trading volumes will drop significantly once the tax comes into effect. An unnamed spokesperson for one cryptocurrency exchange said that “many exchanges will likely close down next year” if the tax is implemented as planned.