PPP's Kim Sang-hoon Hits NTS Over Crypto Tax at Audit, Says It Must Take Responsibility if Rollout Fails

People Power Party lawmaker Kim Sang-hoon sharply criticized the National Tax Service's readiness for virtual-asset taxation, which is scheduled to take effect next year. He said repeated delays do not justify moving ahead with the tax now.

At a parliamentary audit on Oct. 13, Kim said that if the National Tax Service maintains there are no problems with its preparations for virtual-asset taxation, it must take responsibility for any issues that arise after the tax is implemented. He called it "very dangerous" to argue that the time has come to impose the tax simply because it has been postponed several times.

Kim cited fairness relative to stock investors, the absence of loss carryforwards and uncertainty over the scope of taxable assets as key problems with the virtual-asset tax. He said it could be inequitable for crypto investors to receive only a 2.5 million won ($1,800) basic deduction when the financial investment income tax is not being enforced.

He also pointed to the lack of loss carryforwards and the difficulty of accurately tracking transactions through overseas exchanges and private wallets. That could create a fairness problem in which only investors using domestic exchanges are taxed, he said. More time is needed to clearly define taxable sources, the tax base and the scope of taxpayers.

NTS Says Crypto Tax Preparations Face Practical Limits

In response to Kim's questions, the National Tax Service said it would do its best to prepare for enforcement. Ko Young-il, director-general of the Individual Taxation Bureau at the National Tax Service, said the agency is putting in place systems, taxpayer filing support and taxation standards so it can enforce the law without disruption once it takes effect. He added that the agency would focus on minimizing confusion among taxpayers in the early stages of implementation.

NTS Commissioner Lim Kwang-hyun acknowledged practical limits to those preparations. "Everything you pointed out is correct," Lim said. "Even if taxation is decided for next year, virtual assets are still at an early stage and there are various limitations, so it will not be possible to do this perfectly."

He added that the agency would prepare to ensure there are no disruptions in cooperation with virtual-asset exchanges under the current system.