PPP Lawmaker Park Soo-young Says Crypto Tax Should Be Delayed Until Infrastructure Is Ready
Summary
- Rep. Park Soo-young said virtual asset taxation scheduled to begin in January next year should be delayed until the tax infrastructure is in place.
- Park said CARF, limits on taxing overseas exchanges, and the risk that taxation could be concentrated on domestic exchanges were key problems.
- Park said he is concerned about tax fairness with stocks, a further slump in trading at domestic exchanges, and the possibility that some of the five largest exchanges could shut down.
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Rep. Park Soo-young of the People Power Party said South Korea should delay its planned taxation of virtual assets, or cryptocurrencies, set to take effect in January, until the necessary tax infrastructure is fully in place.
TV Chosun reported on October 7 that Park, vice chair of the ruling party’s policy committee, made the remarks on the YouTube channel Newstradamus. He said imposing taxes without adequate preparation was a policy decision driven by ideology while ignoring reality, adding that he was not opposing the tax itself but calling for a delay until the system is ready.
Park said the government still has not identified the number of taxpayers or estimated the revenue the tax would generate, even though implementation is about three months away. He said that when he asked a minister how many people would be subject to the tax and how much revenue it would raise, the response was that the government did not know.
He also pointed to difficulties in tracking transactions made through overseas exchanges. Taxing assets held on foreign exchanges would require countries to share information through the Crypto-Asset Reporting Framework, or CARF, he said. Because major markets including the US, Hong Kong and Singapore are joining on different timelines, taxation could end up falling disproportionately on users of domestic exchanges.
Park also raised concerns about tax fairness compared with stock investing. He said there could be an equity issue if stocks are not taxed while virtual assets are, and that policymakers should also consider opportunities for younger people to build assets.
He said crypto taxation could further deepen the slowdown in trading on domestic exchanges. If the tax takes effect on January 1, 2027, it could further weaken a market that is already contracting, and one or two of the country’s five largest exchanges could shut down, he said.
Park added that South Korea should proceed while monitoring overseas cases and impose the tax only when preparations are complete.
Under the current income tax law, taxation of virtual assets is scheduled to begin on January 1, 2027.
